This is Ravi Verma, In this Article, I would let you know about the DRC-03 Form.
What is DRC-03?
DRC-03 Form is implemented by the GST department for the payment of interest and Liabilities. and this is a voluntary tax payment form that is issued by the GST department to their GST holders.
If any GSTIN holder who did not pay his own taxes to the GST department, then the GST department issues show-cause notice to their GSTIN holder for the payment of interest and liabilities.
What is the reason a taxpayer makes payment in DRC-03
There are different cases for a taxpayer to pay their tax with the help of the DRC-03 form.
- ITC Mismatch – When the GST department starts conducting the audit. If he finds any mismatch in taxes, then he issues a show cause notice to that type of GSTIN holder for the payment of interest and liabilities at the earliest. if the GSTIN holder avails the excess ITC for the payment of their tax then the GST department will issue a show-cause notice for the payment of its interest and liabilities.
- Liability Mismatch – If any GSTIN holder had not paid their taxes according to GSTR-3B and the GST department would be known then he would issue a show-cause notice to that type of GSTIN holder.
- Any demand / Voluntary – when we received any notice from the GST department for non-payment of taxes or shortfall in taxes then due to this type of mistake we would have to pay our taxes with the help of the DRC-03 form.
- Annual return – When we are preparing our audit report for filing, suddenly we saw a shortfall of taxes according to the GSTR-3B. due to this type of mistake first, we will have to pay the taxes and their interest with the help of DRC-03 and after that, we can file our annual return.
- Reconciliation of Statement – when an auditor lets you know that you have not paid your full tax liability on the GST portal then first you will have to pay your tax with interest and penalty with the help of DRC-03 and report it in GSTR-9, It should also be reported in GSTR-9C by the GST auditor.