Introduction of Form DRC-03A by GST Dept.

Introduction of Form DRC-03A for Voluntary Payment Adjustments- Adjust Tax Demand Amount

Goods and Services Tax Network introduction of Form DRC-03A on the GST portal is a significant update, enabling taxpayers to efficiently manage voluntary payment adjustments.  This update, brought in by Notification No. 12/2024, is part of ongoing efforts to improve the GST compliance framework, making it more user-friendly and administratively efficient. Form DRC-03A provides a streamlined way for taxpayers to apply voluntary payments to specific GST demand orders, reducing outstanding liabilities effectively.

GST DRC-03A form has been introduced by GST Network to help taxpayers align their voluntary payments (made via DRC-03) with specific demand orders. This is in response to cases where payments made against orders like DRC-07, DRC-08, MOV-09, MOV-11, or APL-04 were not applied directly to the demand, leaving the demand status as “unsettled” in the Electronic Liability Register.

What this new Form DRC-03A offers:

• Purpose of Form DRC-03A: Form DRC-03A allows taxpayers to adjust or set off voluntary payments made under the original Form DRC-03 against any demand order. This helps in offsetting liabilities that appear in the Electronic Liability Ledger, thus helping to prevent recovery actions from the Goods and Services Tax authorities.
• Adjustment of Payments Against Demands: Suppose a taxpayer has an outstanding Goods and Services Tax demand order of INR 200 and has previously made a INR 50 payment via Form DRC-03. By filing Form DRC-03A, the taxpayer can allocate that ₹50 toward the demand, reducing the remaining liability to INR 150. This ensures that prior payments are properly credited, avoiding discrepancies and reducing the payable amount.
• Improved Accuracy and Alignment: Previously, if payments were not made using designated methods, the GST Network system often did not apply these payments to specific tax demands. Now, with DRC-03A, taxpayers can directly adjust past payments against outstanding dues, simplifying compliance and ensuring accurate alignment of payments with tax demands.

Taxpayer get help from New GST Form DRC-03A :  

Goods and Services Tax DRC-03A form can be especially helpful for certain groups of taxpayers by allowing them to apply voluntary or ad-hoc payments to specific outstanding tax demands, thus ensuring accurate adjustments in their Electronic Liability Ledger. Here’s how different taxpayers can benefit:

• Taxpayers Who Made Partial Payments: Those who have partially paid a Goods and Services Tax demand amount but did not link it to a specific order can now use DRC-03A to align their payment with the correct demand order, reducing the remaining outstanding liability.
• Goods and Services Tax Taxpayers Who Made Ad-Hoc Payments: Taxpayers who paid an amount on an ad-hoc basis without specifying a demand order number can now allocate that payment to a particular demand. This resolves situations where payments were made without a direct link, leaving the demand status unchanged in the system.
• Taxpayers Filing Appeals:  For those with unfavorable tax orders who wish to file an appeal in the GST tribunal, DRC-03A allows them to align any prior payments with outstanding demands. This step is crucial in preventing recovery actions from GST officials while the appeal is in process.

Step-by-step guide to using Form GST DRC-03A:

• Accessing Form DRC-03A:  Log in to the GST portal. Navigate to User Services > My Application > Form GST DRC-03A.  Taxpayers can access this form on the GST portal by navigating through:
  • User Services > My Application > Form GST DRC-03A.

• Adjusting the Payment: In the form, select the relevant demand order (such as DRC-07, DRC-08, MOV-09, MOV-11, or APL-04). Enter details of the amount paid earlier through DRC-03. The system will prompt adjustments against the demand order, effectively reducing the outstanding liability in the Electronic Liability Ledger.

• Once the applicable DRC-03 form is found, fill in the details like Date of filing, Cause of payment, Period From & to, Form GST DRC-03 balance as on date.

• Next Step is to file Form DRC-03A on the GST portal, go to the ‘Demand Order No.’ drop-down menu. This menu displays all outstanding demand orders for which no payment has yet been applied. Choose the relevant demand order number for the payment you want to adjust.
• After selecting the demand order, the system will display key information to verify, including: Demand Order, Date Order,  Type, Period From & To (the relevant tax period)Demand Outstanding as on Date (the current outstanding amount)  Cross-check these details carefully to ensure you are applying the payment to the correct demand. Confirm the adjustment details and submit the form. The system will then update the liability ledger, showing the adjusted demand amount.

• Adjust the Payment: Once you’ve confirmed the details, click on ‘ADJUSTMENT OF DEMAND’.  This action applies the previously paid amount to the selected demand, updating your Electronic Liability Ledger accordingly.
• Once processed, this ensures that the earlier payments are correctly applied to the specified demand, helping to close out the liability in the system.

The activation of Goods and Services Tax Form DRC-03A addresses the issue where earlier payments did not close out the corresponding demand orders, enhancing transparency and simplifying compliance for taxpayers.

How to using Form DRC-03A: 

By using Form DRC-03A, taxpayers can ensure that their voluntary payments are correctly applied to specific demand orders, helping to resolve issues where the demand remained “unsettled” despite payment. Here’s how to use Form GST DRC-03A:

• Eligibility: Only Form DRC-03 forms where the cause of payment is marked as either “Voluntary” or “Others” are eligible for linking with Form GST DRC-03A.
• Steps to Link Payment: Enter the ARN: Taxpayers must input the ARN (Acknowledgement Reference Number) of the DRC-03 form used for the payment.
• Select Demand Order Number: Choose the relevant demand order number (such as those from DRC-07, DRC-08, MOV-09, MOV-11, or APL-04) from the outstanding demands on the portal.
• Auto-Population of Details: Upon entering the ARN and selecting the demand order, the system will automatically populate pertinent information from the DRC-03 form and link it with the demand order, ensuring that the payment is reflected correctly against the outstanding liability.
• Verification and Submission: Taxpayers should verify the auto-populated details to ensure accuracy before submitting. This adjustment updates the demand status in the Electronic Liability Ledger as “settled.”

Requirement for Previous DRC-03 Filers: Taxpayers who have made payments using Form DRC-03 are now required to use DRC-03A to finalize the adjustments. This ensures that any voluntary payment made earlier is properly accounted for and settled.

In Summary Accessing & Using Form DRC-03A

Newly introduced Goods and Services Tax Form DRC-03A on the Goods and Services Tax portal enables taxpayers to link previously made payments (via Form DRC-03) with specific outstanding demand orders.  To use Form DRC-03A, taxpayers can log in to the GST portal, enter the ARN of the DRC-03 form, and select the specific demand order to which they want to apply the payment.

The portal will then auto-populate relevant details, enabling taxpayers to verify and submit the adjustment. By using Form DRC-03A, taxpayers ensure that their payments are properly linked to outstanding demands, reducing the risk of recovery actions and maintaining accurate tax records.

Goods and Services Tax Network has advised taxpayers to use Form DRC-03A to link payments made through DRC-03 with specific demand orders to ensure these payments settle outstanding demands in the Electronic Liability Ledger.  GSTN advises taxpayers to utilize Form DRC-03A to prevent unnecessary recovery actions. If not filed, tax authorities may initiate proceedings under Sections 78 and 79 of the CGST Act to recover amounts marked as unpaid, even if the payment was actually made but unassigned