The issue arises when taxpayers voluntarily pay dues during the investigation stage using Form GST DRC-03. After a demand order—such as Form GST DRC-07—is issued, taxpayers must pay a mandatory pre-deposit to file an appeal before the first appellate authority. However, the GST system may not recognise earlier payments made via DRC-03 while calculating this requirement.
GSTN explained that once a demand order is issued, a unique Demand ID is generated in the Electronic Liability Register on the GST portal. Payments made using the “payment towards demand” option are automatically linked to this Demand ID and adjusted accordingly. In contrast, payments made through Form GST DRC-03 are not automatically mapped to any specific demand and therefore do not reflect as adjusted liabilities in the system.
While processing an appeal, the portal automatically calculates the total amount payable, including admitted dues and the mandatory pre-deposit, and checks payments recorded against the Demand ID. If the recorded payments meet or exceed the required amount, the system allows the appeal to be filed without additional payment. If not, it prompts the taxpayer to pay the balance.
To address the mismatch, GSTN advised taxpayers to link payments made through Form GST DRC-03 to the relevant Demand ID by filing Form GST DRC-03A. This step ensures that such payments are reflected in the liability register and considered while calculating the pre-deposit for appeals.
The advisory stated that once the payment is linked using DRC-03A, the system will recognise it and will not require taxpayers to make duplicate payments at the time of filing an appeal. GSTN has urged taxpayers to complete this linking process, wherever applicable, before initiating appellate proceedings.
First Published: Mar 17, 2026 7:10 AM IST
