KNOW EVERYTHING ABOUT FORM GST DRC 03
Form DRC-03 enables a taxpayer to make voluntary payments, before issuing of notice u/s 73 or 74 of the CGST Act, 2017 or within 30 days of issue of show cause notice (SCN). Facility to intimate payment made voluntarily or made against SCN has now been enabled on GST Portal (refer Rule 142(2) S. Rule 142(3) of the CGST Rules, 2017).
FORM GST DRC- 03 is for the Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement notified under rules 142(2) & 142 (3) of Central Goods and Services Tax Rules, 2017.
What is the facility for Payment on a Voluntary Basis?
Payment on Voluntary Basis is a facility given to taxpayers 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.
What are the pre-conditions to make voluntary payments?
The pre-conditions to make voluntary payment are:
a. In case, voluntary payment is made before issuing of SCN
Show Cause Notice underdetermination of tax should not have been issued.
b. In case, voluntary payment is made after the issue of SCN or statement
30 days’ time has not elapsed since SCN is issued.
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.
What will happen on the 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.
What if I don’t have sufficient balance to make payment against a liability raised in an SCN. What do I do now?
You can deposit the amount in Electronic Cash Ledger through the “Create Challan” functionality which is available on the voluntary payment screen. On click of the “Create Challan” button, you will be redirected to Create Challan screen in the 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.
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 the Services > User Services > My Saved Applications option.
When should a taxpayer make payment in DRC-03?
i)Investigation & Others: If the taxpayer is subject to investigation and during such investigation, it is revealed that the taxpayer had defaulted incorrect payment of taxes, he may voluntarily make payment in DRC-03.
ii) Demand or in response to show cause notice: The taxpayer has an option to pay the tax demanded along with interest using DRC-03 in response to a show-cause notice but within 30 days of the date of the issue mentioned in the show-cause notice.
iii) Form DRC-03 is filed for making a voluntary payment of outstanding liabilities under Sections 73 and 74 of the CGST Act. A taxpayer can self ascertain the tax before issuance of SCN or within 30 days of SCN determination to avoid the hassles of demand and recovery provisions.
iii) ITC Mismatch – GSTR-2A/2B to GSTR-3B: The GST portal also added this as an option in February 2021 for selecting the reason while paying tax in DRC-03. For excess Input Tax Credit (ITC) claims (by more than allowed under the CGST Rule 36(4) of 5% of ITC in GSTR-2B) in GSTR-3B when compared to GSTR-2B, the tax authority may send the notice. The taxpayer must use this form while depositing the excess claims of ITC.
iv)Liability Mismatch – GSTR-1 to GSTR-3B: The GST portal added this option in February 2021 while selecting the reason for using the DRC-03 form. If the tax authorities have sent notice for differences, being shortfall of tax liability in GSTR-3B when compared to GSTR-1, then the taxpayer must make the payment in DRC-03 or reply by justifying the reasons.
v) Annual Return- The taxpayer must conduct reconciliation for the entire year before proceeding to prepare and file annual returns. During such reconciliation, there can be a fresh discovery of any short payment of taxes, interest, or penalties due to non-reporting or under-reporting of taxable supplies. Taxpayers are given an option to pay such tax differences in cash and report it by filing DRC-03.
vi) Audit/Reconciliation Statement- Where the GST auditor has for the financial year under audit, discovered any case of short payment of tax, interest or penalties or excess claim of the input tax credit, and the time limit to report the same in GST returns is expired, the taxpayer must make voluntary payment in DRC-03 and report it in GSTR-9. GST Auditor should report it in GSTR-9C too.
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