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A Guide to Filing GST DRC-20 Form for Payment Deferment or Installments

Taxpayers facing outstanding GST demands can utilize Form GST DRC-20 to request payment deferment or installment options. This guide details the form's purpose, eligibility requirements, and a step-by-step procedure for its online submission. It covers crucial aspects such as the maximum installment period, applicable interest rates, and specific conditions that must be met before filing the application on the GST portal.

📖 3 min read read🏷️ Form GST DRC-20

GST Form DRC-20 allows taxpayers to request either a deferment of a pending lump-sum tax demand or permission to pay the amount in installments. This article provides a detailed overview of its purpose, eligibility criteria, and the precise procedure for filing this crucial form.

Understanding GST DRC-20 and Its Key Provisions

Taxpayers submit Form GST DRC-20 to the Commissioner for one of two purposes:

  • To extend the deadline for settling outstanding tax liabilities.
  • To secure approval for paying the tax amount through installments.

A maximum of 24 monthly installments can be granted. Deferred payments are subject to an 18% interest charge, as stipulated by Section 50 of the CGST Act.

Who Should File DRC-20?

This form is utilized by taxpayers who face outstanding tax demands for recovery but are unable to settle the full amount immediately. It allows them to either defer the payment or arrange for installment payments.

Deadline for Submitting DRC-20

Taxpayers can file Form GST DRC-20 at any point before a recovery ID is generated on the GST portal.

Eligibility and Requirements for DRC-20 Filing

To be eligible for filing Form GST DRC-20, specific conditions must be met:

  • There must be an existing outstanding demand under GST.
  • The demand should not originate from returns and must be recorded in Part B of the Electronic Liability Register.
  • The taxpayer intends to avoid a single lump-sum payment, opting instead for deferment or installments.
  • The taxpayer must not have previously defaulted on the payment for which recovery proceedings are currently active.

Step-by-Step Guide to Filing DRC-20

This section outlines the process for submitting Form GST DRC-20 on the official GST portal.

Accessing the Application

  1. Navigate to the GST portal and log in.
  2. From the Dashboard, select "Services," then "User Services," and finally "My Applications." Alternatively, access it via "Services," "Payments," and "Application for Deferred Payments/Payment in Installments."
  3. On the 'My Applications' page, choose 'Application for Deferred Payment/Payment in Installments' from the dropdown menu and click 'New Application.'

Filling Application Details

  1. The new application page will appear, requiring several details:

  • Demand ID: Select the relevant Demand ID from the provided dropdown. The system will automatically populate details of outstanding demands associated with the chosen ID, including tax period information.

  • Important Notes:

  • An error message will display if the demand amount is below INR 25,000, as deferment is not available for such small sums.

  • If an application for deferment has already been submitted for the selected Demand ID, an error will indicate that a prior application exists.

  • If a Recovery ID has already been generated for the chosen Demand ID, an error will prevent further deferment applications.

  • Type of Payment: Choose between monthly installments or deferred payment.

  • Monthly Installments: If selected, input the desired number of months (up to a maximum of 24). Clicking 'Calculate' will automatically determine the expected monthly installment amounts, inclusive of interest.

  • Deferred Payment: This option allows you to select a specific preferred due date from a calendar.

  • Supporting Documents: Provide a brief description for any supporting documents and then use the 'Choose File' option to upload them.

  • Reasons: While optional, you can enter reasons for your application in this field.

  • Verification: Select the authorized signatory, agree to the declaration by ticking the checkbox, and enter the location. The Designation/Status field will auto-populate.

After completing all details, click the 'Preview' tab.

Final Submission

  1. Review the preview of your application thoroughly. Once satisfied with all the information, click the 'Submit' tab.
  2. On the submission page, complete the filing process using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). Upon successful submission, a provisional acknowledgment page will be displayed. The applicant will also receive an SMS and email confirming the application's successful filing, along with the Application Reference Number (ARN). The acknowledgment can be downloaded using the provided option.

Frequently Asked Questions

What is the Goods and Services Tax (GST) in India?
The Goods and Services Tax (GST) is an indirect tax system implemented in India that has replaced multiple cascading taxes levied by the central and state governments. It is a consumption-based tax levied on the supply of goods and services.
How many types of GST are there in India?
In India, there are four main types of GST: Central GST (CGST) collected by the Central Government, State GST (SGST) collected by State Governments, Union Territory GST (UTGST) for Union Territories, and Integrated GST (IGST) for inter-state transactions and imports.
Who is required to register for GST?
Businesses exceeding a specified annual turnover threshold (which varies by state and type of business) are generally required to register for GST. Additionally, certain businesses, such as those involved in inter-state supplies, e-commerce operators, and non-resident taxable persons, must compulsorily register regardless of turnover.
What is the purpose of an Input Tax Credit (ITC)?
Input Tax Credit (ITC) allows businesses to claim credit for the GST paid on their purchases of goods and services used for business purposes. This mechanism prevents the cascading effect of taxes, ensuring that tax is levied only on the value added at each stage of the supply chain.
Are there penalties for non-compliance with GST regulations?
Yes, significant penalties can be imposed for non-compliance with GST regulations, including late filing of returns, non-payment or under-payment of tax, incorrect invoicing, and fraudulent activities. Penalties can range from monetary fines to imprisonment, depending on the severity of the offense.