Ankit Rahangdale is a seasoned finance professional with a distinguished background as a Chartered Accountant. Currently, he leads the Finance Department at Pice. With over five years of invaluable experience in the banking and finance sector, honing his expertise through esteemed institutions such as ICICI Bank and Standard Chartered Bank.
20 Dec 24
6 mins
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What Is DRC 05 in GST: Intimation of Conclusion of Proceedings
Form DRC-05 concludes demand and recovery proceedings once dues are paid.
Rule 142(3) mandates issuing DRC-05 after verifying tax payments.
Taxpayers must file DRC-03 to report payments before receiving DRC-05.
DRC-05 can be downloaded from the GST portal under "User Services."
Failure to issue DRC-05 keeps recovery proceedings active despite payments.
A tax officer under the GST regime is responsible for issuing form DRC-01A as an intimation to taxpayers for non-payment of taxes or incorrect ITC (Input Tax Credit) claims. Further, the tax officer issues a show cause notice in Form DRC-01 if the taxpayer has not responded to the intimation in Form DRC-01A.
However, on payment of the overdue and appropriate response sent by the taxpayer, a tax officer issues form DRC-05 in GST to conclude the proceedings.
What Is Form DRC-05 in GST?
A proper officer issues Form DRC-05 to conclude an ongoing demand and recovery proceeding. The issuance of Form DRC-05 indicates the competent tax officer's acknowledgement of the taxpayer's payment of taxes, penalties and interest specified in the original notice. It is a confirmation by the tax officer on behalf of the GST authority.
A GST officer cannot issue form DRC-01 notice under Section 73 or 74 for 3 to 5 years after issuing form DRC-05.
When and Why Is DRC-05 Applicable?
Rule 142 (3) of the CGST Act highlights that a proper officer should issue DRC-05 when a business has totally paid outstanding amounts, such as interest and penalties, followed by taxes mentioned in a previously issued demand and recovery notice.
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For instance, a competent tax officer issues a show cause notice in DRC-01 to a taxpayer for under-recovery or overpayment of ITC. The concerned taxpayer has to respond to the notice within 7 days from the date of receiving the notice. He/she can send the reply in Form DRC-01 Part B format, specifying the reasons for the mismatch in ITC.
If the claims of the business are found legitimate according to the GST Act, the proper officer will inform the taxpayer. However, if there are any dues, the taxpayer has to pay them and inform the same to the competent officer in DRC-03. The proper officer will issue Form DRC-05 if he/she is satisfied as proof of concluding the demand proceeding.
A business has to file Form DRC-03 to notify the GST authority about the payment of tax dues, applicable penalties and interest. On receiving the form, the proper officer will check the GST portal to verify the information. The tax officer will issue Form DRC-04 as an acknowledgement if the payment is satisfactory. Further, he will issue Form DRC-05 to the taxpayer to conclude the ongoing proceedings.
How to Check DRC-05 in the GST Portal?
A GSTIN holder can check and download the certificate (DRC-05) from the GST portal in the following way:
Step 1: Visit the official GST portal and log in using your user credentials.
Step 2: Open the dashboard on the portal.
Step 3: Navigate to the ‘Services’ tab and click ‘User Services’.
Step 4: Select ‘Check My Applications’ to check Form DRC-05.
How to Download DRC-05 in the GST Portal?
Once the proper officer issues Form DRC-05 on behalf of the GST authority, it remains on the GST portal as proof of the conclusion of the demand proceeding. You can open the online document and download it to access it at a future date.
A competent tax officer is eligible to issue Form DRC-05. It is an intimation that informs a taxpayer about the end of an ongoing demand and recovery proceeding. In case the proper officer delays issuing Form DRC-05, the concerned demand and recovery proceeding will remain active even if the taxpayer pays the dues and outstanding payments.
Further, on issuance of Form DRC-05, the proper officer cannot issue another show cause notice for around 3 to 5 years. As a result, a business might receive another demand and recovery notice under Section 73 or Section 74 (if applicable) if the proper officer does not issue DRC-05. In addition, a taxpayer might face disruption in filing a GST return on the GST portal if the proper officer does not issue DRC-05.
Conclusion
When a proper officer acknowledges and accepts the payment of tax overdue by a taxpayer along with interest and penalties, he/she issues Form DRC-05 in GST. Rule 142 (3) of the CGST Act provides this responsibility to the proper officer. However, if the tax officer does not file DRC-05, the business might remain vulnerable to receiving another demand and recovery notice under Section 73 or Section 74.
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FAQs
What is Form DRC-05 and why is it issued?
Form DRC-05 is issued by a GST officer to confirm the closure of demand and recovery proceedings after a taxpayer clears all dues, including taxes, interest, and penalties. It serves as an acknowledgment from the GST authority that the matter has been resolved.
When is Form DRC-05 applicable under GST?
Form DRC-05 is applicable under Rule 142(3) of the CGST Act when a taxpayer has fully paid the outstanding dues mentioned in the demand and recovery notice (DRC-01 or DRC-01A). It ensures the conclusion of the recovery process once the payment is verified.
What happens if Form DRC-05 is not issued by the proper officer?
If the officer fails to issue DRC-05, the demand and recovery proceedings remain active, leaving the taxpayer vulnerable to additional notices under Sections 73 or 74, even if the dues are paid. It can also cause disruptions in filing GST returns.
How can a taxpayer check and download Form DRC-05 on the GST portal?
Taxpayers can log into the GST portal, navigate to the “Services” tab, select “User Services,” and click on “Check My Applications.” Once Form DRC-05 is issued, it can be downloaded as proof of the proceeding's closure.
What is the process for filing DRC-05 in GST?
A taxpayer first files Form DRC-03 to report and pay outstanding dues. After verifying the payment, the GST officer acknowledges it through Form DRC-04. If satisfied, the officer issues Form DRC-05 to officially conclude the recovery proceedings.
Ankit Rahangdale is a seasoned finance professional with a distinguished background as a Chartered Accountant. Currently, he leads the Finance Department at Pice. With over five years of invaluable experience in the banking and finance sector, honing his expertise through esteemed institutions such as ICICI Bank and Standard Chartered Bank.
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