Understanding GST Form DRC-05: Conclusion of Proceedings Intimation
GST Form DRC-05 is a crucial document issued by tax officers to confirm the conclusion of demand and recovery proceedings, signifying that a business has fully settled its tax dues, interest, and penalties. Its issuance prevents further DRC-01 notices under specific sections for several years. This form is issued after a business submits DRC-03 to confirm payment, which an officer then verifies. Failure to secure this official intimation leaves a business vulnerable to ongoing or future tax recovery actions.
Businesses and tax authorities utilize DRC forms to facilitate communication regarding demand and recovery processes under GST. This article provides a comprehensive overview of Form DRC-05 within the GST framework.
What is GST Form DRC-05?
Tax officials issue Form DRC-05 to signal the completion of ongoing demand and recovery procedures. This document confirms that a business has settled all outstanding tax liabilities, including any associated interest and penalties specified in an initial notice. It also serves as an official acknowledgment by a designated tax officer of the payment received by the GST authority. Once DRC-05 is issued, GST officers are restricted from sending further DRC-01 notices under sections 73 or 74 for a period of three to five years.
When is DRC-05 Applicable and Why?
Form DRC-05 becomes applicable under Rule 142(3) of the CGST Act when a business fully settles all payments outlined in a prior demand and recovery notice.
For instance, if a tax officer issues a show cause notice (such as DRC-01) concerning an under-recovery or overpayment of Input Tax Credit (ITC), the business must respond within seven working days of receiving the notice. The business can use the DRC-01 Part B format to explain any discrepancies in the input tax credit. This exchange initiates a formal tax proceeding between the business and the tax officer.
If the demands are deemed valid under the GST Act, the business is required to make all necessary payments, including tax dues, interest, and any applicable penalties. After making these payments, the business must notify the officer using DRC-03 to confirm the payment. The officer will then verify the payment's receipt to the satisfaction of the GST department and subsequently issue DRC-05 to the business, formally concluding the demand proceeding.
Procedure for Issuing GST Form DRC-05
Form DRC-05 is issued exclusively by a qualified GST officer. Businesses initiate this process by submitting DRC-03 to inform the authorities that all outstanding tax dues, including interest and penalties, have been paid voluntarily. The designated officer then accesses the GST portal to verify these payments. Once verified, the officer issues DRC-04 as an acknowledgment of payment receipt, followed by DRC-05 to formally close the ongoing proceeding.
How to View DRC-05 on the GST Portal
Since a designated GST officer issues DRC-05 through their interface on the GST portal, a GSTIN holder can access and download this certificate by logging into the GST portal using their credentials. The steps are:
- Log in to the GST portal.
- Navigate to the Dashboard.
- Select SERVICES > User Services.
- Review the "My Applications" section.
Downloading DRC-05 from the GST Portal
After its issuance, DRC-05 is retained online as official documentation confirming the conclusion of the DRC proceeding. Users can open this document within the portal to download and store it on their local system.
Consequences of Not Receiving DRC-05
GST Form DRC-05 serves as official notification that a demand and recovery proceeding has concluded. Only a qualified tax officer is authorized to issue this form. If DRC-05 has not been issued, the related demand and recovery proceedings are considered active, even if the business has already made all due payments.
Consequently, if a business fails to obtain Form DRC-05 from the relevant officer, it remains susceptible to additional demand and recovery actions under Section 73 or Section 74 of the GST Act.