GST DRC-03 explained: paying tax voluntarily or against a notice

When to use DRC-03

• Voluntary payment of tax and interest you find short, before any notice
• Payment after an ASMT-10 scrutiny notice or audit observation
• Payment against DRC-01A before a show cause notice
• Payment within the period allowed after a show cause notice or statement
• Payment of differences flagged in DRC-01B or DRC-01C
• Annual return or reconciliation differences

How to file

On the portal, go to the payment option for intimation of voluntary payment, select the cause of payment, the section, the financial year and period, and enter tax, interest and penalty heads. Where paying against a notice, quote its reference number so the payment is linked. Tax can generally be paid from the cash or credit ledger, while interest, penalty and fee must be paid in cash. Save the ARN.

The cause of payment you choose matters. Options include voluntary payment, payment against a show cause notice, audit, scrutiny, annual return and others. Selecting the right cause and quoting the reference links the payment to the correct proceeding.

What follows

For voluntary payment before a notice, the officer may issue an acknowledgement in DRC-04. Where payment is made against a show cause notice within the period allowed, the proceedings conclude by DRC-05. If the officer finds the payment short, a notice can be issued for the balance.

Common mistakes

• Paying through DRC-03 after a demand order instead of paying against the order in the liability register; DRC-03A now exists to fix this
• Choosing the wrong period or section, so the payment does not link
• Paying tax but not interest
• Forgetting to quote the ARN in the reply to the notice
• Using ITC for amounts that must be paid in cash

Get it handled for you

Received a notice like this? Our chartered accountants draft the reply from your records and an authorised representative follows up with the officer, so you do not have to visit the department. Call or WhatsApp +91 63677 44602, or use the form below.

This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.