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.
DRC stands for Demand and Recovery Case, used by the GST department to recover unpaid taxes from defaulters through legal means.
Form DRC-17 is a statutory notice issued under Section 79(1)(d) of the GST Act for the auction of seized movable or immovable property.
It includes details like recovery amount, auction schedule, and property specifics to ensure transparency in the recovery process.
The format of DRC-17 categorizes assets into shares, movable, and immovable properties, each with detailed identifiers for buyers.
If GST dues remain unpaid beyond 30 days of property seizure, DRC-17 enables lawful auction to recover the pending dues.
The Indian government introduced DRC, or Demand and Recovery Case, to help recover GST dues from taxpayers. There are several DRC forms that help ensure that the GST law is followed by all. This blog will inform you about DRC and one of its specific forms, DRC 17. Moreover, it will also discuss the format of Form DRC 17 in GST, along with other essential information.
Definition of DRC in GST and Its Working
Demand and Recovery Case is a legal procedure through which the tax department of India sends a notice to any business/ individual that has not paid the correct amount of GST. To fulfil different purposes, there are a total of 26 DRC forms. One of these forms is Form DRC 17 in GST.
The government uses DRC to maintain the correct amount of tax collection and prevent tax evasion. In the DRC process, the government can ask for the unpaid GST amount along with additional interest or penalties.
Section 79(1)(d) and Its Relation with Form DRC 17 in GST
Under Section 79(1)(d) of the GST Act, an officer can seize property from a defaulting taxpayer. An officer must follow prescribed rules while doing this. The seized property can be movable or immovable. Generally, an officer can detain property until the person pays their due amount.
The government sells the seized property if the person does not pay within 30 days. After that, the government will use the sale proceeds to recover any unpaid tax amount. They will also recover the costs of seizing and storing the property. The taxpayer receives any remaining amount left after collecting the GST debt.
Form DRC 17 in GST facilitates this process. It serves as a notice for the sale of all/any detained property. It ensures that the officer selling the property follows due process. The government then uses Form DRC 17 to inform the person about the auction of the seized property.
DRC-17 is a form used for providing notice for the auction of immovable/movable property under section 79(1) (d) of the GST Act. It helps the government recover dues legally and efficiently through property sales when taxpayers do not comply. The details that are included in Form DRC 17 in GST are as follows:
Auction time and date
Recovery amount
Details of date, demand order, recovery ID and period
Quantity of the property scheduled to be auctioned
Schedule of shares, movable and immovable property
Format of DRC 17 Notice
In form DRC 17, there are three kinds of schedules, which are shares, movable, and immovable.
Shares
This portion deals with financial securities, specifically shares owned by the defaulter. It lists the names of the companies in which the defaulter holds shares, along with the number of shares for each. This enables interested buyers or investors to assess the potential value and investment opportunity during the auction.
Movable
This part lists all movable goods up for auction. Movable goods refer to items that can be physically transported, such as vehicles, office equipment, machinery, or electronics. For each item, the form mentions its description and the quantity available. This helps potential bidders understand what’s available for purchase and in what volume.
Immovable
This section contains detailed information about immovable properties, such as land, apartments, or buildings. Specific details like the flat or building number, floor number, and the name of the premises or building identify each property.
The address of the property is further broken down into road or street name, locality or village, district, state, and postal PIN code. Additionally, the form optionally includes GPS coordinates and latitude and longitude for more precise location tracking. This detailed description ensures that there is no ambiguity regarding the details of the property that is up for auction.
For a better understanding, take a look at the official format of form DRC 17:
DRC is useful in cases of any default of payment under GST by a taxpayer, where they pay less than what they owe. There are several DRC forms and one of such forms is DRC 17 in GST. This form contains details regarding the auction of any property seized by the government.
If the taxpayer is not capable of paying the pending GST amount themselves, then the government conducts this auction.
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FAQs
What is DRC in GST and why is it important?
DRC stands for Demand and Recovery Case, a legal mechanism under GST used by tax authorities to recover unpaid taxes from taxpayers. It ensures compliance with GST law by allowing recovery through notices, seizure, and auctions. The DRC process is vital for maintaining proper tax collection and deterring tax evasion.
What is the purpose of Form DRC 17 in GST?
Form DRC 17 is used to notify a taxpayer about the auction of their seized property under Section 79(1)(d) of the GST Act. This form lists all details about the property (movable or immovable) that is up for auction. It ensures the process is transparent and follows legal procedures when recovering unpaid GST dues.
When is Form DRC 17 issued by the tax department?
Form DRC 17 is issued after the seizure of a taxpayer's property due to non-payment of GST dues. If the taxpayer fails to settle the outstanding amount within 30 days, the tax officer can initiate an auction. This notice informs the taxpayer and the public about the sale details of the seized property.
What are the key components included in DRC 17?
Form DRC 17 includes the auction date and time, recovery amount, demand order details, and property specifics. The format contains schedules for shares, movable assets (like vehicles or equipment), and immovable assets (like land or buildings). These ensure clarity and full disclosure during the recovery process.
What happens to the money collected from the DRC 17 auction?
The proceeds from the auction are first used to recover the GST dues, along with any penalties and interest. Additional costs like seizure and storage charges are also deducted. If there’s any remaining balance, it is returned to the taxpayer after settling the government’s dues.
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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