DRC-03: Applicability and Procedure to Pay Additional Tax

 What is form DRC-03?

DRC-03 is a voluntary tax 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 GST department.

DRC-03 is a form under the GST law that is required to be filed for voluntary tax payments towards demand or tax shortfall noticed later on after the time limit to file returns of a financial year expires. CGST Rule 142(2) and (3) entails filing of this form.

Below is the format of Form DRC-03:

The following are the causes for making payment under DRC-03:

1. Audit/Reconciliation Statement: Where the GST auditor has for the financial year under audit, discovered any case of short payment of tax, interest or penalties or excess claim of the input tax credit, and the time limit to report the same in GST returns is expired, the taxpayer must make voluntary payment in DRC-03 and report it in GSTR-9. GST Auditor should report it in GSTR-9C too.

2. Investigation & Others: If the taxpayer is subject to investigation and during such investigation, it is revealed that the taxpayer had defaulted incorrect payment of taxes, he may voluntarily make payment in DRC-03.

3. Annual Return: The taxpayer must conduct reconciliation for the entire year before proceeding to prepare and file annual returns. During such reconciliation, there can be a fresh discovery of any short payment of taxes, interest or penalties due to non-reporting or under-reporting of taxable supplies. Taxpayers are given an option to pay such tax differences in cash and report it by filing DRC-03.

4. Demand or in response to show cause notice: The taxpayer has an option to pay the tax demanded along with interest using DRC-03 in response to a show-cause notice, but within 30 days of the date of the issue mentioned in the show-cause notice.

Source : 

https://tutorial.gst.gov.in/userguide/demandsandrecovery/Manual_GST_FORM_DRC-03.htm

By 

GST Info Tamil