GST DRC Forms Explained: What Every Aspiring CA Must Know

Under the Indian Goods and Services Tax (GST) regime, demand and recovery processes are formalized through a structured set of DRC (Demand and Recovery Certificate) forms. These forms serve as standardized instruments for communication between taxpayers and tax authorities regarding tax dues, show cause notices, voluntary payments, recovery proceedings, appeals, and related matters.

This article provides a detailed overview of all 28 GST DRC forms, including their statutory basis, purpose, issuing authority, recipient, and relevance to practitioners, particularly aspiring Chartered Accountants (CAs) who regularly assist clients with GST compliance and dispute resolution.

I. Complete List of GST DRC Forms

Key GST DRC Forms for Aspiring Chartered Accountants

All DRC forms play a role within the GST framework, but certain forms hold greater significance for Chartered Accountants, particularly due to their frequent application in advisory, compliance, litigation, and recovery contexts. These key forms often serve as the first point of contact in tax disputes or compliance shortfalls, making them essential knowledge for aspiring professionals.

1. DRC-01 – Summary of Show Cause Notice (SCN)

Purpose: Form DRC-01 is issued by a GST officer to notify the taxpayer of discrepancies or potential non-compliance. Common grounds include mismatches in Input Tax Credit (ITC), underreported outward supplies, or incorrect tax classification. It initiates adjudication proceedings under Section 73 (non-fraud cases) or Section 74 (fraud/wilful misstatement).

Key Features:

• Summarizes the demand, including tax, interest, and penalties.
• Cites specific sections of the GST Act under which liability arises.
• Highlights the tax period under review and provides a unique reference number for tracking.

Timelines:

• Taxpayers must reply within 7 days of receiving DRC-01 using Form DRC-06.
• Alternatively, the taxpayer may opt to settle the amount within 30 days by using Form DRC-03, thereby avoiding further litigation

Filing Process:

• Generated by the proper officer on the GST portal via:
   Services > Returns > Return Compliance > Additional Notices and Orders.

Reply Process Using DRC-06:

• Log in to GST portal.
• Select the relevant notice under ‘Additional Notices and Orders’.
• Click “REPLY”, upload supporting documents and reasons.
• File with a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).

Download Availability:

• Available on the GST portal under User Services > Additional Notices & Orders.

Applicability:

• Regular taxpayers, e-commerce operators, casual taxable persons, and taxpayers who opted out of the composition scheme.
• Not applicable to those under the composition tax scheme.

Relevance for CAs:

• CAs must analyze the basis of the notice, prepare a legally sound response, and help clients avoid adverse consequences such as blocking of GSTR-1 filing.
• Plays a critical role in pre-litigation GST proceedings.

2. DRC-03 – Intimation of Voluntary Payment

Purpose: Used by the taxpayer to voluntarily pay tax liabilities, either:

• Before the issuance of an SCN (to avoid proceedings), or
• After receipt of SCN or a statement to settle the liability fully or partially.

Scenarios for Use:

• Wrong or excess ITC claim.
• Under-reported liability in GSTR-3B.
• Voluntary disclosure during audit or self-review.

Filing Process:

• Choose the cause of payment (Audit/Investigation/Annual Return/SCN, etc.).
• Enter liability details (tax, interest, penalty).
• Submit and pay via GST PMT-06.

Significance for CAs:

• Ensures transparency and legal compliance.
• Helps CAs facilitate timely resolution of tax disputes and prevents litigation.
• Important for advising clients on whether to contest or settle.

3. DRC-07 – Summary of Order

Purpose: Issued after adjudication under Sections 73 or 74, this form summarizes the final order passed by the GST authority. It formalizes the conclusion of proceedings and details the amount payable.

Contents:

• Final tax liability (including tax, interest, penalty).
• Deadline for payment.
• Reference to appeal rights and relevant provisions.

Relevance for CAs:

• Essential for advising clients post-assessment.
• Helps in planning cash flows or initiating appeal procedures.
• The basis for filing Form GST APL-01, if the taxpayer chooses to appeal.

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4. DRC-20 – Application for Deferred Payment/Installments

Purpose: Allows taxpayers facing liquidity constraints to apply for payment of tax dues in installments. Approved by the jurisdictional Commissioner under Section 80 of the CGST Act.

Key Features:

• Maximum of 24 monthly installments allowed.
• Interest at 18% per annum applies on outstanding amounts.
• Default in payment of any installment leads to the revival of the entire demand.

Filing Process:

• Application must be submitted with reasons and financial documents.
• Commissioner evaluates and may approve or reject via Form DRC-21.

Significance for CAs:

• Valuable option for clients under financial stress.
• CAs assist in preparing the financial rationale, documentation, and compliance with installment terms.
• Strategic tool to avoid coercive recovery actions such as property attachment or bank account freeze.

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Why These Forms Matter for Aspiring Chartered Accountants

1. Real-World Application: These forms are frequently encountered in client practice. Mastery of their use allows CAs to manage client notices efficiently, ensuring legal compliance and minimizing risk exposure.

2. Advisory and Representation:

CAs help clients:

• Respond to SCNs (DRC-01) effectively.
• Make informed decisions on settlement (DRC-03).
• Plan post-assessment actions (DRC-07).
• Explore options for deferred payment (DRC-20).

3. Litigation Support: Correct use of these forms ensures that the client’s position is documented and defensible in appellate forums, where procedural compliance is critical.

4. Time-Sensitive Compliance: Many of these forms have strict statutory deadlines. Delay can lead to penalties, interest, or loss of appeal rights.

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Additional Insights

• Forms in Use: While all 28 forms are part of the GST rules, only a few like DRC-01, DRC-01A, and DRC-03 are currently in active use. Others, such as DRC-10 for auctions, will be implemented as needed, reflecting the evolving nature of GST enforcement.
• Legal Basis: These forms are rooted in the CGST Act and Rules, with updates like DRC-01A inserted via Notification No. 49/2019 – Central Tax dated 9th October 2019 restriction on ITC case difference GTR-3B return CBIC notifies, and DRC-01 and DRC-02 formats updated via Notification No. 16/2019 – Central Tax, dated 29th March 2019, effective from a specified date.

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