The GST regime has recently seen the introduction of a new form, DRC-03A, through Notification No. 12/2024 dated July 10, 2024. This form addresses a significant issue faced by taxpayers who had erroneously paid GST against demand orders using Form GST DRC-03. Form GST DRC-03 is intended solely for voluntary payments of tax liabilities, not for payments against demand orders issued by jurisdictional proper officers.
The Issue
Many taxpayers, unaware of the correct procedure, used Form GST DRC-03 to pay GST against demand orders. As a result, these payments were not appropriated against the demand liability created in their Electronic Liability Ledger. This left taxpayers in a predicament, with payments made but not credited against their liabilities, requiring them to approach GST authorities for appropriating these payments. However, as per GST law, such appropriation was not possible.
Resolution through Form GST DRC-03A
To resolve this issue, the GST Council introduced Form GST DRC-03A. The new form allows taxpayers to appropriate payments made through Form GST DRC-03 against the demand liability in the Electronic Liability Ledger.
Filing Process for Form GST DRC-03A
The steps to file Form GST DRC-03A are as follows:
- Open Form GST DRC-03A: Access the form on the GST portal.
- Provide ARN of Form GST DRC-03: Enter the Application Reference Number (ARN) of the DRC-03 form through which the payment was made.
- Auto-Population of Details: The details from Form GST DRC-03 will be auto-populated in Form GST DRC-03A.
- Reference Number of Demand Order: Enter the reference number of the demand order (including rectification/appeal order) against which the payment was intended.
- Auto-Population of Demand Details: The details of the demand will be auto-populated in the form.
- Verify Undertaking and Verification: Check the undertaking and verification sections of the form.
- File with DSC or EVC: Submit the form using Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
Impact of Filing Form GST DRC-03A
Upon filing Form GST DRC-03A, the demand liability will be considered paid to the extent of the amount paid in Form GST DRC-03. This provides a significant relief to taxpayers who had previously made payments in error due to a lack of knowledge.
Importance of Form GST DRC-03A
Form GST DRC-03A serves as a bridge between the Electronic Liability Ledger and voluntary payments made through Form GST DRC-03. It clarifies the appropriate use of each form and prevents future misapplications of payments.
Additional Use Case: Payment of Pre-Deposit for Appeals
Form GST DRC-03A also addresses another critical issue regarding the payment of pre-deposit prior to filing an appeal before the GST Tribunal. Given that the GST Tribunal has not yet been constituted, taxpayers are currently unable to file appeals, resulting in pressure from field authorities for demand recovery.
Government Guidelines for Pre-Deposit
The government has provided guidelines to address this issue:
- For unpaid amounts: Taxpayers should pay 20% of the disputed tax against the demand created in the Electronic Liability Ledger.
- For amounts paid through Form GST DRC-03: Taxpayers should file Form GST DRC-03A to appropriate the amount paid against the demand created in the Electronic Liability Ledger.
After making the payment, taxpayers must submit an undertaking to the jurisdictional proper officer, stating that they will file an appeal before the Appellate Tribunal once it becomes operational. This stay of demand will remain until the stipulated timelines for filing an appeal expire, effective from the Tribunal’s formation date.
Form GST DRC-03A Details
The form includes detailed sections for:
- GSTIN and Legal Name: Auto-populated fields.
- ARN of DRC-03A and DRC-03: Enter the respective ARNs.
- Amount Paid: Auto-populated details of the amount paid through DRC-03.
- Demand Order Reference: Enter the reference number and date of the demand order.
- Undertaking and Verification: A declaration confirming the intended payment and agreeing to pay back any misappropriated amounts with interest and penalties.
Conclusion
The introduction of Form GST DRC-03A is a significant step towards simplifying the GST payment process and addressing taxpayer concerns. It ensures that voluntary payments and payments against demand orders are appropriately handled, reducing administrative burdens and preventing future issues. This proactive approach by the GST Council and the government reflects their commitment to addressing taxpayer issues and streamlining the GST process.
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