All you need to know about Form DRC-03 in GST?

GST is a value-added tax levied at all points in the supply chain, with credit allowed for any tax paid on input acquired for use in making the supply. It would apply to both goods and services in a comprehensive manner, with exemptions restricted to a minimum.

Section 73 of the GST Act pertains to determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts. While, Section 74 of the GST Act pertains to determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts.

Payment on Voluntary Basis is a facility given to tax payers 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 in Form DRC 03. Let us learn more about Form DRC – 03 in detail in this article.

What is Form DRC – 03?

DRC-03 is a payment form in which a taxpayer can pay the tax by raising its liability voluntarily or in response to the show cause notice (SCN) raised by the Department. As per Section 73(7) and Section 74(7), the tax officer is expected to verify the payment received from the taxpayer and if the amount paid falls short of the amount actually payable, they shall proceed to issue the notice in respect of such amount which falls short of the amount actually payable.

How can one make payment in Form DRC – 03?

To make payment against the liability (tax, interest & penalty) based on self-ascertainment of tax before issuance of SCN or within 30 days of SCN under determination of tax, one has to perform the following procedure:

• Access the http://www.gst.gov.in URL. The GST Home page is displayed.
• Login to the GST Portal with valid credentials.
• Click the Services > User Services > My Applications command.
• Choose any 1 of the 3 circumstances under which a taxpayer makes payment
  • A taxpayer has not made any payment and does not have a payment Reference Number (PRN).
  • A taxpayer has generated PRN but is unutilized and comes for payment within 30 minutes of generation of PRN.
  • A taxpayer has generated PRN and is unutilized and the taxpayer comes for payment after 30 minutes of generation of PRN.

Case 1 – A taxpayer has not made any payment and does not have a payment Reference Number (PRN).

• Select the Application Type as ‘Intimation of Voluntary Payment – DRC-03’ and then click ‘New Application.’
• A taxpayer will get 2 options whether payment is made Voluntary or against SCN:
  1. Voluntary payment: Payment date will be auto-populated without an option to edit.
  2. Payment against SCN: A taxpayer has to manually enter SCN Number and select the issue date which must be within 30 days of making 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 the saved application, navigate to Services > User Services > My Saved Applications option.
• Select the Section under which payment is being made, the Financial Year and then select the “from date” and “to date” of the overall tax period.
• Provide details of payment including interest and penalty. A taxpayer can provide additional details by clicking on ‘Add’. Then, click ‘Proceed To Pay’.

• Voluntary payment page will be displayed which will be divided into 3 sections:
  1. Liability Details: Liabilities are displayed in this table.
  2. Cash Ledger balance: The cash balance available as on a particular date is reflected in this table. The taxpayer has to enter the value of cash to be paid from the available balance against outstanding liabilities.
  3. Credit Ledger balance: ITC available as on date is reflected in this table. The taxpayer has to enter the value of liability to be paid through ITC and click Set Off.
• A confirmation message will pop up stating the cash and ITC balance being used up for making payment. On clicking ‘Ok’, a PRN will be generated along with a successful payment message.
• If PRN is not available, it can be extracted from the ‘Electronic Liability Register’ under Services>Ledgers>Electronic Liability Register.
• To view the draft DRC-03, Click the ‘Preview’ button on the page-‘Intimation of payment made voluntarily or against SCN’.
• Provide reasons if any, in the field provided. Choose a file in the attachments section to upload. Click on the verification checkbox and then select the ‘Authorised Signatory’ and enter the ‘Place’.
• Click on ‘File’. Two options will be available:
  1. File with DSC: Browse the certificate and click on the button ‘sign’.
  2. File with EVC: An OTP will be sent to the registered mobile number and email ID. On validation of OTP, a success message will be received along with ARN.

Case 2 – A taxpayer has generated PRN but is unutilized and comes for payment within 30 minutes of generation of PRN.

• Follow the steps as mentioned in Case 1 till the taxpayer reaches on Intimation of payment made voluntarily or against the SCN page.
• Select ‘Yes’ for the option – Have you made payment? And enter the PRN.
•  A link of ‘Get payment details’ will be displayed. Once the taxpayer clicks on it, details will be auto-populated on the basis of the respective payment that was made.
• Click on ‘Preview’ to view draft DRC-03 and then follow the same steps to file the application as mentioned in Case 1.

Case 3 – A taxpayer has generated PRN and is unutilized and the taxpayer comes for payment after 30 minutes of generation of PRN.

• Follow the steps as mentioned in Case 1 till the taxpayer reaches on Intimation of payment made voluntarily or against the SCN page.
• Select “Yes” for the option – Have you made payment? And enter the PRN.
• A link, known as ‘Get payment details’ will be displayed. Click on the link and enter the details, since the details will not be auto-populated as mentioned in Case 2. This happens because the time limit of 30 minutes has passed.
• The processing will happen in the Back end, wherein the system will check whether the amount entered by taxpayer matches with the payment made. If yes, the intimation form will be accepted. If no, an error message will pop up.
• Hereafter, follow the same steps as mentioned in Case 1 for filing the application DRC-03.
• With respect to Case 2 and Case 3 if the PRN is already utilized, an error message will be displayed asking the taxpayer to enter the unutilized PRN.

Are there any conditions related to making voluntary payments?

The pre-conditions to make voluntary payment are:

• In case, voluntary payment is made before issue of SCN – Show Cause Notice under determination of tax should not have been issued.
• In case, voluntary payment is made after issue of SCN or statement – 30 days’ time has not lapsed since SCN is issued.

What will happen on filing of Form GST DRC-03?

Electronic Liability Register, Electronic Cash Ledger and Electronic Credit Ledger will be updated upon filing of Form GST DRC-03 i.e. Debit/Credit (both) entry will be posted simultaneously and PRN will be generated accordingly.

How is Form GST DRC-03 processed?

• The DRC-03 is displayed on the dashboard of Jurisdictional Range Officer, who in turn verifies himself or reassigns to the proper officer depending upon monetary limit since the verification of DRC-03 falls in the ambit of adjudication.
• The Jurisdictional Range Office should carefully check and verify the details available in the documents received with the DRC 03 and re-assign to the proper officer any number of times associated with adjudication, Audit Commissionerate, Anti-Evasion Wing of Commissionerate or DGGI, as applicable.
• The Officer to whom DRC-03 is re-assigned can either do the verification of the form himself or he can delegate it to his Inspector.
• The verification process of DRC 03 involves answering logical queries in the system leading to either acceptance of payment or issue of SCN.
• In case, payments are made voluntarily and the validation tests are cleared, the proper officer can issue DRC-04 (Acknowledgement of acceptance of payments made voluntarily).

• In case, deficiencies if any, are found the tax officer is expected to seek clarification offline, from the taxpayer in this regard.
• The records of such offline communication have to be uploaded to the system.
• During the process of verification, a series of questions/checklist appears on the screen of the user.
• The subsequent questions change on the basis of the validations. Further, if it has been established by the officer that there is a fraud/willful misstatement/ suppression from the taxpayer and still, the payment (DRC-03) is received from the taxpayer is in respect of Section 73, and then the revised section gets changed to 74 and doesn’t allow issue of DRC-04.
• Further, the revised liability as calculated by the tax officer is allowed to be captured in the system.
• If the proper officer is of the opinion that the amount paid voluntarily falls short of the amount actually payable, he shall proceed to issue the show cause notice manually and then upload DRC-01 online, in respect of such amount which falls short of the amount actually payable.
• The verification process of DRC 03 made against an SCN, involves verification of interest paid. If validations are cleared, DRC-05 shall be issued for the conclusion of proceedings.
• For the issue of DRC-05, the entire payment has to be made once within 30 days from the date of issue of show cause notice. Partial payments are not allowed on the common portal.

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