An Alumnus of IIM and DU with almost a decade of experience in the banking and finance sectors. I had the opportunity to work with all types of institutions in BFSI ecosystem like Bank, NBFC, Fintech, Consulting and Auditor. I started my professional journey at KPMG and subsequently worked in leading names of the BFSI sector including Ujjivan Bank, Vistaar Finance. Currently building a fintech startup ( PICE) by handling alliances, compliance and creation of GTM strategy for payments and credit product.
In India, DRC denotes Demand and Recovery Case within the Goods and Services Tax (GST) framework. It refers to a procedure that enables tax authorities to collect pending GST payments from a taxable person. The process of DRC ensures that every business must adhere to the GST system and pay the outstanding taxes.
As per government-backed data, there is an overall count of 28 DRC forms till now. In this blog, we are going to explain DRC 15 in GST, its purpose and its format.
Definition of DRC
Suppose a business owner has not paid the outstanding GST amount to the government. Then, the government takes serious action. The respected tax department informs the business owner by sending a notice. It is a robust form that the Indian government uses to ensure businesses are complying with regulations.
DRC: How This Legal Process Works
When a taxpayer has not paid the right amount of GST that is needed, then the tax authorities can send an official notice, a DRC form. Through this document, they ask for the remaining balance, including any applicable interest and penalties.
This official document plays a crucial role in shaping the GST framework in India. It helps tax authorities to make the tax collection process seamless and prevent tax evasion.  This legal process ensures that every business contributes appropriately to the tax system.
What is DRC 15 in GST?
Form DRC 15 can be used to initiate recovery through the execution of a civil court decree. As per Rule 146, if a defaulter is entitled to receive money through such a decree, whether by payment, sale or enforcement of a mortgage, the proper officer may request the relevant Magistrate or Judge to execute the decree.
The court, following the Code of Civil Procedure, 1908, may then credit the net proceeds to the Government to recover the outstanding dues. This formal request is made through this DRC form.
A Demand and Recovery Case (DRC) refers to a legal action taken by tax authorities when a business fails to pay the appropriate GST, resulting in the issuance of a demand notice. The DRC 15 in GST, one of such notices, is a crucial part of the tax recovery structure.
Understanding how it works, its format and other significant information ensures proper compliance and efficient tax enforcement.
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FAQs
What is DRC-15 in GST?
DRC-15 is a formal GST form used to initiate recovery of dues through a civil court decree. It allows the proper GST officer to request the execution of such a decree when the taxpayer (defaulter) is entitled to receive money via a court order. The court may then direct the amount payable under the decree to be transferred to the government to recover outstanding GST dues.
When is DRC-15 used in the GST recovery process?
DRC-15 is used after all regular recovery methods have failed, and the defaulter has a court decree in their favor for payment, sale proceeds, or mortgage enforcement. The GST officer then approaches the civil court, under Rule 146 of the CGST Rules, to redirect those proceeds to the government. It ensures judicial assistance in enforcing tax recovery.
What legal rule governs the use of DRC-15?
The application of DRC-15 is governed by Rule 146 of the Central Goods and Services Tax (CGST) Rules, 2017. This rule allows the tax officer to recover dues by requesting execution of any civil court decree involving monetary compensation to the defaulter. It is implemented in accordance with the Code of Civil Procedure, 1908.
What details are included in Form DRC-15?
The DRC-15 form typically includes: Details of the civil decree Name and GSTIN of the defaulter Amount receivable through the decree Name of the court and case reference Request for crediting net proceeds to the government It acts as a formal communication to the court for recovery action.
Why is DRC-15 important for tax enforcement under GST?
DRC-15 is a critical tool for tax enforcement, especially when dues are recoverable through judicial proceedings. It helps prevent defaulters from enjoying court-awarded benefits without paying their GST liabilities. By channeling proceeds directly to the government, it ensures compliance, accountability, and legal efficiency in tax recovery.
An Alumnus of IIM and DU with almost a decade of experience in the banking and finance sectors. I had the opportunity to work with all types of institutions in BFSI ecosystem like Bank, NBFC, Fintech, Consulting and Auditor. I started my professional journey at KPMG and subsequently worked in leading names of the BFSI sector including Ujjivan Bank, Vistaar Finance. Currently building a fintech startup ( PICE) by handling alliances, compliance and creation of GTM strategy for payments and credit product.
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