Applicability and Procedure to File Form DRC-03

All About Form DRC-03

The applicability and procedure for filing Form DRC-03 is crucial to the taxpayer in the subject of filing returns properly. The conditions and steps for filing form DRC-03 online are explained in this article along with the time limit in which the form has to be furnished.

1. About Form DRC-03

Form DRC-03 is a payment form which is filed by a taxpayer for paying tax. This tax is paid by raising its liability voluntarily or as a response to a Show Cause Notice (SCN). The form is filed for paying the taxpayer’s outstanding liabilities under Section 73 and Section 74 of the CGST Act:

• Section 73: Deals with tax which is unpaid or underpaid without any fraudulent intention or invocation.
• Section 74: Deals with tax which is unpaid or underpaid with some fraudulent intention or invocation.

The tax can be self-ascertained by the taxpayer as voluntary payment before an SCN is issued. Otherwise, the tax can be paid by the taxpayer as a response to the SCN within 30 days of issuance of the SCN. This will avoid any hassle of demand and recovery provisions.

The format of Form DRC-03 is as follows:

These payments should be made from either the Input Tax Credit which is available in the Electronic Credit Ledger or the cash balance in the Electronic Cash Ledger. However, utilization of ITC is not available in case of interest and penalty payment. Only cash payment can be made in such cases.

2. How to File Form DRC-03?

In order to file Form DRC-03, the following steps may be followed:

Step 1 – Log in to the GST Portal

Step 2 – Under ‘User Services’, click on ‘My Applications’

Step 3 – Choose one of the three cases under which payments are to be made by the taxpayer:

Case 1: No payment has been made and the taxpayer does not have a Payment Reference Number (PRN)

Step 1 – Select ‘Intimation of Voluntary Payment – DRC-03’ as Application Type and click on ‘New Application’

Step 2 – Two options will be shown. Select the relevant one:

(i) Voluntary Payment: Auto-population of payment date which cannot be edited. This application can be saved at any filing stage for up to 15 days, after which the draft will be deleted from the database. You may view the saved application by clicking ‘User services’ under ‘Services’ and selecting the option of ‘My Saved Applications’.

(ii) Payment Against SCN: Manually enter the SCN number and choose its date of issue (which should be within 30 days of making payment)

Step 3 – Select the payment section, financial year, and the ‘from’ and ‘to’ dates of the tax period.

Step 4 – Enter the payment details including interest and penalty. Click ‘Add’ to make any additions to details provided. Then click ‘Proceed to Pay’.

Step 5 – The page for voluntary payment will be displayed which will include 3 sections:

(i) Liability details: This will display all liabilities

(ii) Cash Ledger Balance: This will display the available cash balance till date. Payable value of cash will have to be entered manually by the taxpayer.

(iii) Credit Ledger Balance: This will display the available ITC till date. The payable value of liability has to be entered manually by the taxpayer. Then click ‘Set-Off’.

Step 6 – A pop-up will appear showing the confirmation message and the cash and ITC balance which is being utilized for completing the payment. Click ‘OK’ to generate a PRN. A success message will appear. PRN can be extracted from the ‘Electronic Liability Register’ which can be found in ‘Ledgers’ under ‘Services’.

Step 7 – In order to view the DRC-03 draft, click ‘Preview’ on the ‘Intimation of payment made voluntarily or against SCN’ page.

Step 8 – Provide any of your reasons and choose the attachments to be uploaded. Tick the verification box. Select your ‘Authorized Signatory’ and enter your ‘Place’.

Step 9 – File the form with DSC or EVC (through OTP).

You will receive a success message along with the ARN on your registered mobile number or e-mail address.

Case 2: PRN has been generated but remains unutilized and the taxpayer has come for payment within 30 minutes of generating the PRN.

Step 1 – The same steps are to be followed as in Case 1 until you reach the page ‘Intimation of payment made voluntarily or against the SCN’.

Step 2 – Under ‘Have you made payment?’ click on ‘Yes’ and enter your PRN.

Step 3 – Click the ‘Get Payment Details’ link so as to auto-populate the form with respective payment’s details

Step 4 – To view the DRC-03 draft, click ‘Preview’ and follow the same steps as Case 1.

Case 3: PRN has been generated and remains unutilized and the taxpayer has come for payment after 30 minutes of generating the PRN.

Step 1 – The same steps are to be followed as in Case 1 until you reach the page ‘Intimation of payment made voluntarily or against the SCN’.

Step 2 – Under ‘Have you made payment?’ click on ‘Yes’ and enter your PRN.

Step 3 – Click the ‘Get Payment Details’ link and enter the respective payment’s details. The form won’t be auto-populated in this case as the time limit for the same has expired. The details entered will then be verified and the intimation form will be accepted or rejected accordingly.

Step 4 – To view the DRC-03 draft, click ‘Preview’ and follow the same steps as Case 1.

In case the PRN has already been utilized in cases 2 and 3, then an error message will be shown asking the taxpayer to enter an unutilized PRN.

3. Reporting Cash Payments in GST Returns

Cash payments in GST returns are reflected in the Electronic Cash Ledger as follows:

• Monthly Return in GSTR-3B: All cash payments are reflected in the Electronic Cash Ledger. The ITC balance can first be utilized by the taxpayer to pay off tax liabilities. In case the ITC balance is less than the liabilities, the difference will have to be paid in cash.
• Annual Return in GSTR-9: Any remaining tax liability which has not been paid in GSTR-3B will have to be paid in GSTR-9. The balance available in the electronic cash ledger will be used to pay off outstanding liabilities, If the available cash balance is lesser than the liabilities, a challan will have to be issued so as to make additional payment in cash.
• Demand Notices: Both ITC and cash balance available can be used to make payment of demand notices. An additional cash challan will have to be issued so as to pay the remaining liabilities. Interest and penalty are only payable in cash. An acknowledgement will be issued in Form DRC-04 by the proper officer with respect to the payment made in Form DRC-03. An order will be issued in Form DRC-05 by the officer to conclude the proceedings.