GST Portal Update: Linking DRC-03 Payments for Appeals

GSTN Advisory Clarifies Treatment of Investigation Payments for Appeal Pre-Deposit​

GST Portal Issue Over Pre-Deposit Recognition Addressed​

The Goods and Services Tax Network (GSTN) has issued a fresh advisory to resolve concerns raised by taxpayers regarding the GST portal’s handling of payments made during investigations. The clarification comes after multiple instances where the system continued to demand mandatory pre-deposit amounts while filing appeals, despite taxpayers having already made payments earlier.

Payments via DRC-03 Not Automatically Linked to Demand Orders​

The issue primarily arises in cases where taxpayers voluntarily deposit dues during the investigation stage using Form GST DRC-03. Once a formal demand order, such as Form GST DRC-07, is issued, taxpayers are required to make a mandatory pre-deposit to proceed with an appeal before the first appellate authority.

However, GSTN has clarified that payments made through DRC-03 are not automatically mapped to any specific demand. As a result, these payments do not get reflected as adjusted liabilities against the generated demand, leading to discrepancies when the system calculates the pre-deposit requirement.

How the GST System Calculates Appeal Liabilities​

According to GSTN, once a demand order is issued, a unique Demand ID is created in the Electronic Liability Register on the GST portal. Payments made using the “payment towards demand” option are directly linked to this Demand ID and are automatically adjusted.

During the appeal process, the portal computes the total payable amount, including admitted dues and the mandatory pre-deposit. It then checks payments recorded against the Demand ID. If sufficient payment is available, the system allows the appeal to proceed without further payment. Otherwise, taxpayers are prompted to pay the remaining amount.

GSTN Suggests Filing DRC-03A to Link Payments​

To resolve the mismatch, GSTN has advised taxpayers to link payments made via Form GST DRC-03 with the relevant Demand ID by filing Form GST DRC-03A. This step ensures that such payments are properly reflected in the Electronic Liability Register.

Advisory Aims to Prevent Duplicate Payments​

GSTN stated that once the payment linkage is completed using DRC-03A, the system will recognize the earlier payments and will not require taxpayers to make additional or duplicate payments when filing an appeal.

Taxpayers have been urged to complete this linking process, wherever applicable, before initiating appellate proceedings to avoid system-related discrepancies.