DRC-03: Procedure to Pay Additional Tax and its Applicability

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DRC-03 is a shape used to report voluntary tax bills as described via way of means of the GST regulation of the country. It is achieved whilst the authorities discovers a call for or deficiency of taxation after the closing date for submitting tax returns for a economic yr has passed.

The DRC complete shape in GST is known as the ‘Demand and Recovery Forms’. There are instances whilst one may find out that they have got now no longer mentioned their earnings efficaciously or may have ignored out on some thing even as submitting GST returns. In such instances, companies or people eligible for submitting GST returns can use the DRC-03 shape to make a voluntary fee.

DRC 03 shape also can be stuffed incase you’ve got got already filed a GST go back however want to accurate it. It may be because of many instances inclusive of wrong calculation, misreporting or underreporting of earnings. When Should You Use DRC-03 to Make Payment?

Here is a rundown of the exclusive times whilst you ought to make fee thru DRC-03:

  1. Audit/Reconciliation Statement: The maximum not unusualplace motive for making fee thru DRC-03 is whilst an auditor of GST unearths out you’ve got got been underpaying your taxes, pursuits or consequences.

A comparable state of affairs also can rise up if the auditor discovers you’ve got got claimed greater enter to your tax credit score than you had been entitled to (for the yr being reviewed) and the full time for asserting the error withinside the returns of GST has already passed. If both of those happens, you ought to make a fee voluntarily thru DRC-03 Form (& record the equal in GSTR-9).

  1. Investigation:

If an earnings tax payer is beneathneath crook inspection and it seems they’ve did not make tax bills that they ought to have, a voluntary tax fee thru DRC-03 is wanted to clear up the problem.

  1. Annual Returns: It is wellknown exercise for taxpayers to reconcile their bills and price range for the yr previous to submitting their every year returns. Suppose you find out which you have made brief taxes or hobby bills or have did not pay consequences for misreporting of taxable supplies. In that case, you could pick to make up for the tax disparity thru a voluntary tax fee the usage of DRC-03.

You also can use DRC-03 to accurate mistakes withinside the computation of taxes or to pay the extra tax because of adjustments to your financial circumstances.

  1. Mismatch of Liability – GSTR 1 – GSTR 3B: Included withinside the listing of motives for DRC 03 paperwork for use on February 21, this feature permits you to pay company tax legal responsibility shortfalls thru a shape of DRC 03. For example, when you have acquired a word approximately your GSTR 3B now no longer matching up together along with your GSTR 1, you’re eligible to recompense the distinction thru a DRC 03 shape (or justify why there may be a disparity).
  2. In reaction to a display motive word: If confronted with this kind of word, a taxpayer will pay the specified tax (plus hobby) the usage of a DRC-03 shape. However, observe that it need to be paid inside a calendar month (30 days) of the word’s first issued.

For instance, in case you acquire a word in October and pay via way of means of November, it’ll be taken into consideration paid in the required month. However, in case you wait until December to make the fee, it’s going to now no longer be taken into consideration as such (and as an alternative handled like another tax fee).

  1. Mismatch of ITC – GSTR 2A/2B – GSTR 3B: Another motive for the usage of DRC-03 is whilst a taxpayer gets a notification that they have got claimed an extra tax credit score inputs of their GSTR-3B as compared to their GSTR-2B. The shape can be used whilst the taxpayer is depositing surplus ITC claims.

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