The Goods and Services Tax Network ( GSTN ) has launched a new form, GST DRC-03A, accessible on the GST portal. This form allows taxpayers to adjust tax amounts already paid against specific GST demand orders. For example, if you have a pending GST demand of ₹200 and have already paid ₹50 using the DRC-03 form, you can utilize the DRC-03A to adjust that ₹50 against the demand, reducing your net tax liability to ₹150.

Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now Previously, if taxpayers did not utilize the designated payment methods to settle their dues, the GSTN system did not automatically apply those payments to outstanding tax demands. However, the introduction of DRC-03A simplifies this process, enabling taxpayers to align their payments with their obligations more easily. GSTN noted, “It has been observed that some taxpayers have inadvertently paid amounts via DRC 07/DRC 08/MOV 09/MOV 11/APL 04 through DRC-03 instead of using the ‘Payment towards demand’ feature on the GST portal. This has resulted in situations where payments have been made but the corresponding demands remain open in the electronic liability register. The government has now addressed this with the new form, GST DRC-03A,” as stated in their advisory on November 5, 2024.

Filing the GST DRC-03A Form To file the GST DRC-03A form on the GST portal, follow these steps: Log in to the GST portal, navigate to ‘User Services,’ and select ‘My Applications.’ The GST DRC-03A form will be visible. Enter the DRC-03 form number and click ‘Search.’ Once located, fill in the following details: Date of filing Cause of payment Period (From & To) DRC-03 balance as of the current date Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now Select the ‘Demand Order No.’ from the dropdown. This will display all outstanding demands with unpaid amounts. Choose the relevant demand order number. After verifying the details, click on ‘ADJUSTMENT OF DEMAND.’ How to Use the GST DRC-03A Form for Demand Adjustment The GSTN has clarified that the new Form GST DRC-03A allows taxpayers to link payments made via DRC-03 with their respective demand orders.

According to GSTN: “Taxpayers should utilize the DRC-03A form to connect the payment made through DRC-03 with the relevant demand order. Only DRC-03 forms where the payment reason is categorized as ‘Voluntary’ or ‘Others’ are eligible for use in the DRC-03A. Taxpayers will need to enter the ARN of the DRC-03 along with the relevant demand order number on the portal. The system will auto-populate necessary information from both the DRC-03 form and the corresponding demand order.” Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now After submitting the DRC-03A form and the adjustment is completed, the updates will be automatically reflected in the taxpayer’s liability ledger.

The Ministry of Finance, via the Central Board of Indirect Taxes and Customs (CBIC), emphasized in a circular dated July 11, 2024, that failure to file the DRC-03A application may lead to recovery actions as per Sections 78 and 79 of the CGST Act. Several groups that may find the DRC-03A form particularly useful are: Taxpayers who have made partial payments on any GST demand and wish to adjust those against specific orders. Taxpayers who have made payments on an ad-hoc basis without citing a demand order and now seek to align those payments with specific orders. Master GST Notice Replies – Drafting 20 Notices, Including Appeals – Register Now Taxpayers facing unfavorable tax orders who wish to appeal to the GST tribunal and avoid recovery actions from GST officials.

With the GST appellate tribunal ( GSTAT ) yet to be established, taxpayers who have lost appeals against tax demand orders cannot pursue further appeals in the GST tribunal. In such cases, GST officials may initiate recovery for any outstanding amounts. For instance, if a taxpayer faces a ₹100 demand and files an appeal, they must pre-deposit 10% of that amount. If the appeal fails, recovery proceedings may commence for the remaining ₹90. Filing the DRC-03A can temporarily prevent such recoveries until GSTAT issues further directives.