THE Goods and Services Tax Network (GSTN) has introduced a new form, GST DRC-03A, now available on the GST portal. This form allows taxpayers to adjust the tax the demand amounts they have already paid under a specific GST demand order. It is particularly beneficial for those who have made partial or full payments via Form DRC-03 and wish to align these payments with an existing GST demand order.For example, if you have a pending GST demand order of Rs 200 and you have already made a payment of Rs 50 using Form DRC-03, you can file DRC-03A to adjust this Rs 50 per compared to the on-demand order. This way, your net tax liability will decrease to Rs 150.

If taxpayers did not use the designated payment method to settle their taxes, the GSTN system failed to adjust these payments against their outstanding tax claims. However, with the introduction of this new form, it will now be much easier for them to use their payments to settle their tax obligations.

“It was observed that some taxpayers paid the requested amount through DRC 07/DRC 08/MOV 09/MOV 11/APL 04 through DRC-03 instead of using the payment facility ‘Payment on demand’ available on the portal of GST This has led to a situation where the application has been paid by the taxpayer, but the application is not closed in the electronic liability register. To solve this problem, the government has notified a new form named GST. .DRC-03A…” GSTN said in a notice dated November 5, 2024.

How to use GST form DRC-03A to adjust your GST demand payment

GSTN has announced the availability of new GST Form DRC-03A on the GST portal. This form allows users to adjust amounts already paid via DRC-03 against the corresponding sight order.

GSTN said, “Taxpayers are advised to use Form DRC-03A to link the payment made through DRC-03 with the demand order. Only DRC-03 forms where the cause of payment is “Voluntary” or “Other”. can be used in Form GST DRC-03A. Taxpayers will need to enter the DRC-03 ARN as well as the corresponding demand order number on the portal. sight order number of any pending application, the system will automatically populate the relevant information of the DRC-03 form as well as the specified demand order against which the payment is to be adjusted. “GSTN further stated that once you file the DRC-03.03A and the adjustment has been made in the system, the corresponding entries will be automatically recorded in the taxpayer’s liability ledger to reflect the updated status of GST claims “In case the taxpayer does not file a claim in GST FORM DRC-03A on the common portal, the competent officer may proceed to recover the amount payable in accordance with the provisions of the section 78 and section 79 of the CGST Act,” said the Ministry of Finance through the Central Board of Indirect Taxes and Customs (CBIC) in a circular dated July 11, 2024.

“This is a good notice from GSTN as it will help those taxpayers who have already paid the requested GST amount, but the GST portal shows the amount as pending. This situation can arise due to various reasons, like for example: a taxpayer paid Rs 1 lakh through Form DRC-03 against GST claim on ad hoc basis, but the tax claim order number was not given, i.e. say a mismatch The system in this situation cannot configure for which exact tax claim orders the taxpayer has made this payment is now resolved through GST Form DRC-03A,” says Chartered Accountant Bimal Jain, Founder of. A2Z Taxcorp LLP.

For which taxpayers the new GST form DRC-03A can be useful

According to Jain, the new GST form DRC-03A can help the following taxpayers:

• Taxpayers who have partially paid a requested GST amount and wish to adjust it with a specific tax demand order,
• Taxpayers who have paid a GST demand amount on a one-off basis without specifying a demand order number and now wish to adjust it with a specific tax demand order,
• Taxpayers benefiting from adverse tax orders who wish to appeal to the GST Tribunal and therefore wish to prevent collection by GST officers for the tax demand.

“Since the GST Appellate Tribunal (GSTAT) is yet to be established, taxpayers who have lost any appeal against the tax demand order cannot appeal to the GST Tribunal So, in this situation, GST officials will initiate recovery proceedings against the taxpayer for payment of pending tax demand For example, a GST tax demand order of Rs 100 has been issued. passed against the taxpayer The taxpayer must now appeal this order to the Appeals Commissioner pre-deposit 10% of the tax demand order, which is Rs 10 in this example. the order against you So now you cannot appeal to GSTAT, what happens is that the GST officials start recovery proceedings against you for 90% of the tax demand since. you already pre-deposited 10% earlier. To avoid this situation, taxpayers can now file GST Form DRC-03A which will prevent the collection of the balance of the pending tax demand until. the moment GSTAT passes an order requiring otherwise,” says Jain.

It adds that you need to file Form GST DRC-03A quoting the adverse order number against which you wish to appeal in GSTAT as and when it comes into force.

How to file GST Form DRC-03A on the GST portal

As per GSTN advisory, here is a step-by-step guide on how to file GST Form DRC-03A:

Step 1: Log in to the TPS portal and click Services, then navigate to “My Apps” under the “User Services” tab. The GST form DERC-03A will be visible here. You need to enter the GST DRC-03 form number and click on the “Search” button. Once you find the applicable DRC-03 form, complete the following information:

• Filing date,
• Cause of payment,
• Period From & to,
• Balance of GST form DRC-03 as of date

Source: GSTN notice

Step 2: Select “Order number on demand”. in the drop-down list. It will display all outstanding receivables for which payment has not been made. You must select the relevant On-Demand Order number from this drop-down list. Upon selection, the following details will be displayed:

• Order date on request,
• Order type
• Period from & to,
• Request in progress as of date

Once you are done checking the details, click on “REQUEST ADJUSTMENT”.

Source: GSTN notice