Section 80 of the CGST Act allows a taxpayer to apply for deferred payment of tax or to make the payments in instalments by filing Form GST DRC-20. In this article, we shall discuss the following:
Form GST DRC-20 is filed by a taxpayer (to the Commissioner) asking:
- An extension of time for payment of dues or
- To allow payment of any amount due under the CGST Act in instalments,
except for the self-assessed tax amount arrived as per the return of the taxpayer.
This permission can be asked for a maximum of 24 monthly instalments.
Note: The deferral/instalment payments will attract interest at the rate of 18% under Section 50 of the CGST Act.
The conditions for filing Form GST DRC-20 are: –
- In case of any default in payment of any instalment on its due date, the whole outstanding amount on such date shall become due and payable by the taxpayer, without any further notice.
- The taxpayer shall not be allowed to make applications of Form GST DRC-20 in case they have already defaulted in the payment of an amount on which recovery is in process.
- In case the taxpayer has not obtained the approval of the appropriate Commissioner for making payments in instalments in the preceding financial year then, the taxpayer will not be allowed to make such payments in the current financial year as well.
- Deferred payment/payment in instalments will not be allowed If the amount for which such application is made is less than INR 25,000.
The various features of Form GST DRC-20 are: –
- Only one application for deferred payment/payment in instalment can be submitted per Demand ID.
- Interest under Section 50 of the Act will be calculated only on the tax/cess amount that has been applied for deferral/instalments and not on the interest, penalty, and any other amount with respect to the Demand ID.
- The interest that needs to be paid by the taxpayer will not be added to the monthly amounts against the Demand ID. The Commissioner will create a separate Demand ID for the interest to be collected from the taxpayer.
- While the applications are under process, the Application Reference Number (ARN) will undergo status changes like- ‘Pending for Processing’, ‘Approved’, ‘Application approved with modification’ or ‘Rejected’.
- The taxpayer can view the details of instalments to be paid by them along with the status of payments on their instalment calendar. The instalment calendar can be navigated on the GST Portal by logging into the taxpayer’s account under ‘Services’ 🡪 ‘Payments’ 🡪 ‘Instalment Calendar’.
- Soon after the taxpayer has filed Form GST DRC-20, the jurisdictional officer will provide a report to the Commissioner about the capability of the taxpayer to clear the dues. The Commissioner then, after due consideration of the report, will issue an order in Form GST DRC-21 allowing the taxpayer to make the payments in monthly instalments.
Step 1: Log in to the GST portal
Login to the GST Portal with valid credentials and on the dashboard, go to ‘Services’ 🡪 ‘User Services’ 🡪 ‘My Applications’ OR go to ‘Services’ 🡪 ‘Payments’ 🡪 ‘Application for Deferred Payment/ Payment in Instalments’ (Refer screenshot below). Under ‘My Applications’:
- Select ‘Application for Deferred Payment/Payment in Instalments’.
- Select the applicable dates.
- Click on ‘NEW APPLICATION’.
Step 2: Fill in the required details.
‘New Application’ page gets displayed. Fill in the details as follows (Refer screenshot below):
- In the ‘Demand ID’ field, enter the Demand ID and click on ‘SEARCH’. A list of outstanding demands gets displayed, and the ‘Tax Period’ field gets auto-populated.
- In the ‘Type of Payment’ field, select one of the two options between ‘Monthly Instalments’ and ‘Deferred Payment’:
- If the ‘Monthly Instalment’ option is selected, then a field to enter the number of months appears. Fill in the number of months opted for instalments and click on ‘CALCULATE’. This will calculate and display the ‘Expected Monthly Instalment’ table along with a note which specifies the rate of interest which is charged on the tax/cess amount.
- If the ‘Deferred Payment’ option is selected, a field called ‘Due date of payment’ appears. Enter the preferred due date of payment.
- Under the ‘Upload Supporting Documents’ section, in the ‘Enter Document Description’ field, enter a succinct description of the JPEG/PDF document that you wish to upload. Taxpayers should note that the document should not be more than 5MB in size. Then click on ‘Choose File’ to upload the document.
- Under ‘Reasons’, enter an appropriate reason as to why you are filing this application.
- Under ‘Verification’, read and check the declaration box and enter your name in the ‘Name of Authorized Signatory/Applicant’ box. The Designation/Status gets auto-populated, and the date automatically appears (current date) in the date field.
- Enter the place of filing the application.
- Click on ‘PREVIEW’ to download and review the application and if you are satisfied, click on ‘SUBMIT’.
Step 3: Submit the application
Under ‘Submit Application’, select either ‘SUBMIT WITH DSC’ or ‘SUBMIT WITH EVC’.
Once the application is submitted, a ‘Provisional Acknowledgement’ page gets displayed. An intimation is sent via an SMS. Furthermore, an email that the application has been successfully submitted along with the Application Reference Number is also sent.
To download the filed application, click on ‘DOWNLOAD’ OR ‘Go To My Applications’🡪My Applications. The status of the application on the dashboard then shows as ‘Pending for Processing’.
- Once the application is filed, an ARN is generated on the GST Portal. You can access the generated ARN by logging in on the portal under ‘Services’ 🡪 ‘User Services’ 🡪 ‘My Applications’ 🡪 ‘Case Details’ 🡪 ‘APPLICATIONS’/ ‘ORDERS’.
- The Demand ID will be flagged on the DCR, showing that an application has been raised against it.
- Once the application has been submitted, the concerned jurisdictional Commissioner will review the application and carry out the required due diligence and approve or reject the application. Accordingly, the application status on the portal will change from ‘Pending for Processing’ to ‘Approved’/ ‘Application approved with modification’/ ‘Rejected’.
- The status of the Recovery ID, in case of acceptance or modification, will change to ‘Deferred Payment/Payment by Instalment’. In case of rejection, the status of Recovery ID remains the same as before applying for deferral/payment in instalments. After acceptance, in case of any default in the payment of monthly instalments, the status will change from ‘Deferred Payment/Payment by Instalment’ to ‘Recoverable’.