GST outstanding demand payment-DRC-03 and DRC 03A!

Navigating the complexities of GST compliance can be challenging, especially when it comes to addressing outstanding tax demands and making voluntary payments. The Government has introduced Forms GST DRC-03 and DRC-03A to streamline this process, allowing taxpayers to settle liabilities either before or after the issuance of a Show Cause Notice (SCN) and to adjust payments against demands efficiently. This blog answers the most frequently asked questions regarding these forms and provides step-by-step clarity on how and when to use them for voluntary tax payments and demand adjustments.

FAQs > Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement or intimation of tax ascertained through Form GST DRC-01A Intimation of Voluntary Payment

1. What is the facility for Payment on a Voluntary Basis?

Payment on Voluntary Basis is a facility given to tax payers to make payment u/s 73 or 74 of the CGST Act, 2017 within 30 days of issuance of Show Cause Notice (SCN). Payment could also be made by taxpayers before SCN is issued.

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2. When can I make a voluntary payment?

You can make voluntary payment before the issue of notice u/s 73 or 74 of the CGST Act, 2017, or within 30 days of the issue of show cause notice (SCN) under the said sections. You cannot make voluntary payment after 30 days of issue of SCN.

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3. What are the pre-conditions to make voluntary payments?

The pre-conditions to make voluntary payment are:

1. In case, voluntary payment is made before the issue of SCN
   
   • Show Cause Notice under determination of tax should not have been issued.
2. In case, voluntary payment is made after the issue of SCN or statement
   
   • 30 days’ time has not lapsed since SCN is issued.‍

‍4. How can I make a voluntary payment?

To make voluntary payment against the liability (tax, interest & penalty) based on self-ascertainment of tax, navigate to Services > User Services > My Applications > Intimation of Voluntary Payment - DRC - 03 option.

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5. Can I make partial payment against a liability raised in a SCN?

GST Portal does not allow for making partial payments against a liability raised in a SCN. Complete payment of the amount being demanded in SCN has to be made.

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6. Can I save the application for intimation of voluntary payment?

Application for intimation of voluntary payment can be saved at any stage of completion for a maximum time period of 15 days. If the same is not filed within 15 days, the saved draft will be purged from the GST database. To view your saved application, navigate to Services > User Services > My Saved Applications option.

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7. I don't have sufficient balance to make payment against a liability raised in a SCN. What do I do now?

You can deposit the amount in Electronic Cash Ledger through "Create Challan" functionality which is available on voluntary payment screen. On click of "Create Challan" button, you will be redirected to Create Challan screen in Payment module. In the Create challan page, challan amounts will be auto-populated based on the amount of additional cash required considering the tax liabilities and others.

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8. What will happen on filing of Form GST DRC-03?

Electronic Liability Register, Electronic Cash Ledger, and Electronic Credit Ledger will be updated upon the filing of Form GST DRC-03 i.e. Debit/Credit (both) entries will be posted simultaneously and PRN will be generated accordingly.

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9. How is a taxpayer communicated about the issuance of any notice/order by the system?

The system sends an email and SMS to the taxpayer on issuance of any communication (Notices/Orders) by the Tax Officer to the taxpayer.

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10. When would a taxpayer need to select “Liability mismatch- GSTR-1 to GSTR-3B” and “ITC Mismatch- GSTR-2A/2B to GSTR-3B” as the cause of payment while making payment under “Intimation of Voluntary Payment-DRC-03”?

Taxpayer needs to select “Liability mismatch- GSTR-1 to GSTR-3B” as cause of payment, when there is a liability mismatch between Form GSTR-1 and Form GSTR-3B and taxpayer is making payment of such liability using Form DRC-03.

The taxpayer needs to select “ITC Mismatch- GSTR-2A/2B to GSTR-3B” as the cause of payment when there is an ITC mismatch between Form GSTR-2A/2B and Form GSTR-3B and the taxpayer is making payment of such liability arising using Form DRC-03.

These are additional reasons made available under Intimation of Voluntary Payment-DRC-03 for taxpayers for making payments for liabilities noticed later on. The navigation to make such payment is Services > User Services > My Application > Application Type > Select Intimation of Voluntary Payment-DRC -03, Click New Application > select Cause of Payment.

FAQs > Form GST DRC-03 A

1. What is Form GST DRC-03A?

Form GST DRC 03A has been introduced in the GST portal to adjust payments made through Form GST DRC 03 against any outstanding demand in electronic liability register.

Taxpayers against whom the demand is raised in Form GST DRC 07/DRC 08/MOV 9/MOV 11/APL 04 and for which the payment has been done through Form GST DRC-03 under ‘Voluntary’ or ‘Others’ categories can file Form GST DRC-03A.

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2. Which demand can be adjusted against Form GST DRC-03 by Form GST DRC-03 A?

The demands that can be adjusted against the Form GST DRC-03 will be Assessment, Demand, Enforcement, APL-04, Revision Order, Remand Order and rectification.

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3. What will happen if the amount available in Form GST DRC03 is equal to or less than the amount in demand ID?

If the amount available in Form GST DRC03 is equal to or less than the amount in demand ID, then the entire/partial amount can be adjusted by taxpayer. Taxpayer can utilize any amount according to his/her requirement.

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4. Can taxpayer file Form GST DRC-03A if DRC-03 has been filed against SCN cause of payment?

No, a taxpayer cannot file Form GST DRC-03A if DRC-03 has been filed against SCN cause of payment.

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5. Can I use Form GST DRC-03 more than one time also for issuance of Form GST DRC03A?

Yes, Form GST DRC-03 can be used more than one time also for issuance of Form GST DRC03A till the entire amount is utilised.

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6. Which kind of Form GST DRC-03 payments are eligible for offset by Form GST DRC-03A?

Form GST DRC-03 filed under Voluntary Payments and Others categories of cause of payment will be eligible for offset by Form GST DRC-03A.

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7. What is the DRC-03 Register?

DRC-03 Register will be available for taxpayers to view the accurate remaining balance of Form GST DRC-03 after adjustment is made against a demand through Form GST DRC- 03A.

Taxpayers can access the DRC-03 Register option by navigating to Services>>User Service>>DRC-03 Register post login to the GST portal. Note: The DRC 03 register is presently available for DRC 03s which are used in the DRC 03A form

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8. What would happen if I entered an invalid reference number in the Form GST DRC-03 Reference Number field?

If taxpayer enters invalid reference number in Form GST DRC-03 Reference Number field then error message will be displayed on the screen- “Please enter a valid DRC-03 reference number”.

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9. Can I enter the DRC-03 reference number which does not have a positive amount for adjustment in the Form GST DRC-03 Reference Number field?

No, DRC-03 should have a positive balance in at least one of the major minor heads i.e. it should not have been completely utilized in any previous DRC-03A.

On entering such a DRC-03 reference number in the Form GST DRC-03 Reference Number field following error message will be displayed on the screen: “There is no balance available in DRC-03 for adjustment against the demand”.

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10. Can I enter the DRC-03 reference number in the Form GST DRC-03 Reference Number field for which DRC-03 has been offset against GST PMT-03A?

No, In DRC 03A, a taxpayer cannot enter DRC-03 reference number which has been used in Form GST PMT-03A. The following error message will be displayed on the screen- “This payment has been already utilized against FORM GST PMT-03A”.

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Conclusion

Understanding the correct usage of Forms GST DRC-03 and DRC-03A is crucial for the timely and compliant settlement of GST liabilities. Whether you're addressing mismatches, responding to notices, or adjusting payments against existing demands, these forms offer structured mechanisms to ensure accuracy and transparency in the GST framework. By following the prescribed guidelines and timelines, taxpayers can avoid penalties and maintain a smooth compliance track under the GST regime.

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