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 write it in GSTR-9. GST Auditor should say it in GSTR-9C too.
2. Investigation & Others: If the taxpayer is subject to investigation and during such research, 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 preparing and filing 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.
Form DRC-03 is filed for making a voluntary payment of outstanding liabilities under Sections 73 and 74 of the CGST Act. A taxpayer can self ascertain the tax before issuing SCN or within 30 days of SCN determination to avoid the hassles of demand and recovery provisions.
Section 73 – deals with cases where there is non-payment/under-payment of tax without any intention or invocation of fraud.
Section 74 – deals with cases where there is non-payment/under-payment of tax with intention or invocation of fraud
6. ITC Mismatch – GSTR-2A/2B to GSTR-3B: The GST portal also added this as an option in February 2021 for selecting the reason while paying tax in DRC-03. For excess Input Tax Credit (ITC) claims (by more than allowed under the CGST Rule 36(4) of 5% of ITC in GSTR-2B) in GSTR-3B when compared to GSTR-2B, the tax authority may send the notice. The taxpayer must use this form while depositing the excess claims of ITC.
Note: All payments need to be made either from input tax credit available in the electronic credit ledger or cash balance available in the electronic cash ledger. But, in the case of interest and penalties, ITC utilization is not general, and it has to be compulsorily paid in cash.
Form DRC-03 is used for making a voluntary payment of tax. Can make Voluntary payment :
1. Voluntary payment: The payment date will be auto-populated without an option to edit.
2. Payment against SCN: A taxpayer must manually enter the SCN Number and select the issue date, which must be within 30 days of making payment.
Note: Can save the application for Intimation of voluntary payment at any stage of completion for a maximum of 15 days. If the same is not filed within 15 days, the saved draft will be purged from the GST database.
To view your saved application, navigate to the Services > User Services > My Saved Applications option.
(1) Liability Details: Liabilities are displayed in this table.
Note: If PRN is not available, it can be extracted from the ‘Electronic Liability Register’ under Services>Ledgers>Electronic Liability Register.
Step (c) A link, known as ‘Get payment details’ will be displayed. Once the taxpayer clicks on it, details will be auto-populated based on the respective payment made.
Step (c) 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 prerequisites for making voluntary payment are:
(a) Where the voluntary payment of tax is made before issuing of SCN-
The taxpayer cannot make partial payments against a liability raised in the show-cause notice. Even the GST portal does not provide an option for making partial payments.
Can save the application for Intimation of voluntary payment can be held at any stage for a maximum of fifteen days. If the same is not filed within that time, we will remove the saved draft from the GST database.
To view the saved application, go to ‘Services’ > click on ‘User Services’ > option called ‘My Saved Applications’.