DRC-03 : During the process of filing GST returns, there may be chances that a taxman find additional liability left to pay. GST has provision that allow you to pay the liability using “FORM GST DRC-03”.
FORM DRC-03 Is the facility at GST portal. It is made available so that taxpayers can pay additional liability voluntarily before issuance of Show Cause Notice (SCN) under sections (discuss in this article) or within 30 days of Show Cause Notice (SCN) or statement issued by tax official.
Steps for Payment through Form DRC-03 in Common Portal
Step 1: Login into GST Portal and navigate to Services > User Services > My Applications.
Step 2: In“Application Type”, select “Intimation of Voluntary Payment- DRC 03” from drop-down and click on “NEW APPLICATION”.
Note: Draft of Application for intimation of voluntary payment can be saved for a maximum period of 15 days. To view the saved application, Go to Services> User Services> My Saved Applications option.
Step 3: Select “Cause of Payment i.e. (Voluntary, SCN, Annual return, Reconciliation statement and Others).” If Payment is made, then give Payment Reference Number (PRN).
How to create GST Payment Challan in Portal?
Step 3(i): If Voluntary Payment (when excess credit claim etc.) is selected > select the appropriate section and Financial Year from the list.
Step 3(ii): If SCN (When notice received from department) is selected > Select appropriate section and Financial Year; enter SCN Reference Number and date (either system generated or manual)
Step 3(iii): If Annual return (during annual return filling found any liability) is selected > Choose appropriate section and Financial Year.
Step 3(iv): If Reconciliation Statement (during annual GST audit found any liability) is selected> Choose appropriate section and Financial Year.
Step 3(v): If Other (any other reason not in sections) is selected > Provide appropriate section and Financial Year and others if any.
Step 4: After entering all the information above properly, select the period and relevant Act below and details of payment including interest and penalty. A taxman can give additional details by clicking on ‘Add’. After that click ‘Proceed to Pay’.
Step 5: The liability to pay is to be set off from electronic credit ledger and electronic cash ledger by entering the value of liability against respective field i.e. from Cash or ITC.
Step 6: File DRC 03 with EVC or DSC.
Acknowledgement in Form GST DRC-04 : Upon filing of Form GST DRC-03, the tax officer will issue an Acknowledgement in the Form GST DRC-04 (Acknowledgement of Acceptance of voluntary payment).
Points to Remember:
- In case of voluntary payment after issue of SCN or statement, remember 30 days of time has not lapsed since SCN is issued.
- All the payments need to be made either from input tax credit available in electronic credit ledger or cash balance available in the electronic cash ledger. But, in case of interest and penalties ITC cannot be used. It has to be compulsorily paid in cash.
- GST Portal does not allow for making partial payments against a liability declared voluntarily. The payment has to be made with reference to amount being declared or already demanded in SCN.
Composition Scheme under GST- Question and Answers
- 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 deleted.
- Voluntary payment under Section 73 before issuance of SCN: NO Penalty. Payment within 30 days of issuance of notice : NO Penalty. Within 30 days of communication of order : 10% of Tax evaded or Rs.10,000 whichever is higher. In such cases, the proceedings against them will get closed.
- Option for voluntary payment under Section 74 before issuance of SCN: 15% Penalty. Payment within 30 days of issuance of notice: 25% Penalty. Within 30 days of communication of order: 50% Penalty. In these cases, the proceedings against them will get closed.
14 Blocked Input Tax Credit (ITC) under GST
Common Errors/Mistakes/Questions:
Error: “Enter the correct amount (Sum of Cash/ITC) that is equal to the amount to be paid towards liability”, while making payment.
Solution: Check amount entered by you in DRC-03 with amount you are going to set-off.
Question: Where can I get the payment reference number (PRN) for filing GST DRC 03 voluntary payment? Payment is already made.
Solution: If PRN is not available, you can get it from Electronic Liability Register Part-II under services > ledgers.
E-Way Bills- One stop solution
Question: Excess tax payment made via DRC-03?
Solution: Any tax paid in excess, you can claim as refund from Govt. As per Section 54 (8) (e) of CGST Act,2017.
Question: Rate of Interest?
Solution: Availed excess ITC – Interest @ 24% p.a. Output Tax liability not paid – Interest @ 18% p.a.
GST Interest Calculator
Question: Can I pay interest amount through ITC?
Solution: No, in case of interest and penalties ITC cannot be used. It is compulsory to pay this in cash.
Relevant Sections:
Section 73: deals with cases where there is non-payment/under-payment of tax without any intention or invocation of fraud.
Section 74: deals with cases where there is non-payment/under-payment of tax with intention or invocation of fraud.
Section 52: Collection of tax at source.
Section 55: Refund in certain cases.
Section 63: Assessment of unregistered persons.
Section 76: Tax collected but not paid to Government.
Section 122: Penalty for certain offences e.g. Where a taxable person who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice.
Updated List of Reverse Charge Mechanism (RCM) with Examples
Section 123: If a person who is required to furnish an information return fails to do so within the period specified in the notice issued then proper officer may direct that such person shall be liable to pay a penalty.
Section 124: Fine for failure to furnish statistics.
Section 125: General penalty.
What are the GST Penalties and prosecution?
Section 127: Power to impose penalty in certain cases by proper tax officer.
Section 129: Detention, seizure and release of goods and conveyances in transit.
Section 130: Confiscation of goods or conveyances and levy of penalty.
For any questions, you may reach us at Discussion Forum
The author of above article is Punit Chaplot.
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