Understanding DRC-03 Form in GST: Applicability, Full Form and Method to Pay Additional Tax

Last Updated : Sept. 15, 2023, 3:26 p.m.

DRC full form in GST or Demand and Recovery Forms are used to make up for incorrect or deficient tax payments to the government. The form comes under the GST law of the country. The DRC full form in GST specifically refers to the Demand Recovery Certificate. To simply define, DRC-03 in GST is paid in two circumstances: firstly, when there is an incorrect representation of the income and secondly, when the government discovers a taxation deficiency after the passage of the deadline for filing tax returns.

Method to Pay Additional Tax DRC-03 in GST

Firstly, the applicants interested in filling the DRC-03 in GST must log in, followed by choosing one of the methods.

Initial Step

Log in to the GST portal or website via the link (https://www.gst.gov.in/). Head to the ‘My Applications’ section under ‘User Services’. Opt for the appropriate choice among the below-mentioned three options.

Choices in Second Step

Case 1: The taxpayer hasn’t paid and lacks PRN or Payment Reference Number.

Step 1: If the candidate falls in this category, then look for the ‘Application type’ and click on the ‘Intimation of Voluntary Payment – DRC-03’ option. Select the option ‘New application’.

Step 2: Now choose between SCN Payment, Show-Cause Notice, and voluntary payment. Candidates choosing SCN payment will enter the SCN number and then have to choose the date of issuance. The date of issuance must be within 30 days from the date of payment.

The candidates choosing the voluntary payment option will have an automatically populated date without the option for modification.

Step 3: Choose the ‘Section’ for payment followed by the choice of ‘Fiscal year of the payment’ along with the ‘from date’ and ‘to date’ of the overall tax period.

Step 4: Now fill in the payment information, penalties and interests. Further, click on ‘add’ to add more information, followed by the click on ‘continue to pay’ button once you are done.

Step 5: Begin filling out the details on the voluntary page for payment, which comprises three sections: liability details, cash ledger balance and credit ledger balance.

Step 6: Post successful completion, there will be a pop-up displaying a confirmation message containing details about the amount of cash and ITC used for payment. Proceed by clicking the ‘OK’ button to generate a PRN along with a payment success message.

Case 2: The taxpayer possesses PRN but hasn’t used it. The candidate requests payment within half an hour of the PRN generation.

Step 1: Look for ‘Application type’ and select ‘Intimation of Voluntary payment – DRC-03’ and then ‘New application’.

Step 2: Find the option of ‘Have You Made Payment?’, choose the ‘Yes’ option, and fill in the PRN details.

Step 3: The website will display a link stating ‘get payment details’. Opt for this option; the candidate will have the details auto-populated according to the earlier payment.

Step 4: Choose the ‘preview’ option to view the draft of DRC-03 in GST and then apply normally.

Case 3 : A taxpayer has generated PRN but hasn’t used it yet. They request payment 30 minutes after PRN generation.

Step 1: Follow the same steps as earlier and reach the ‘Have you made payment?’ option.

Step 2: Fill in the PRN details and manually enter the information on the ‘get payment details’ link.

Step 3: The link will not be auto-populated due to the expiry of half an hour timer.

Step 4: The following steps will again continue using priorly stated methods in Case 1 to fill the application DRC-03.

Applicability of DRC-03 Form

The different and specific situations when you should make payment through DRC-03 include:

• Audit or reconciliation statement: The case occurs when a candidate is found to have underpaid the taxes, penalties or interests. This case also encompasses more input in tax credits than deserved. It should be for the reviewing year, and the total time for declaration of mistakes in GST returns has passed. In any of the two stated cases, the candidates must voluntarily pay through the DRC-03 form and additionally report in GSTR-9.
• Annual returns: Account reconciliation and ensuring accuracy in financial records is the general and standard practice for taxpayers to perform mandatorily before filing annual returns. Encountering errors, underpaid penalties, interest, or tax must be rectified during the process by filling out the tax payment DRC-03 voluntarily.
• Investigation: The revelation of underpayment of taxes during the investigation allows the option of voluntarily filling out the form.
• Issuance of Show Cause Notice: The taxpayers must fill out the form on the issuance of notice. The application, after issuance of show cause notice, must be filed within 30 days after first issued.
• Mismatch of Liability – GSTR1 – GSTR3B: If the taxpayers receive the notice of a mismatch of the two forms, namely FSTR 1 and GSTR 3B, then they can opt to fill the form and pay the remaining amount. Alternatively, the taxpayers can justify the disparity as well.
• ITC Mismatch – GSTR 2A/2B – GSTR 3B: If the taxpayer claims an excess tax credit in GSTR 3B in comparison to GSTR 2B and receives a notification for the same, the right choice is to use the form which is depositing surplus ITC claims.

Course of Action After Filing DRC-03

On successful filing of the form, the status changes to ‘Pending Tax Officer Approval’. If the form is filled accurately and in concern with the exact reason, the candidates filing the form should expect a DRC-04 form from the tax officer. The form acts as the acknowledgment of acceptance of the Voluntary Payment form. Note that there is no limit to filing DRC-03 forms regardless of the pending status of acknowledgment from the tax officer.

Frequently Asked Questions