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Annual return liability

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Vikasanand Gupta

110 Points Posted on 17 July 2020

An additional liability under Annual return is to discharged through DRC-03 in cash or credit.

pls clarify with relevant notification/circular/instruction.

Replies (3)

Quick Summary

This discussion clarifies how to discharge annual return liabilities using Form DRC-03. While DRC-03 allows payment via Electronic Credit Ledger (ITC) or Electronic Cash Ledger, it's crucial to note that interest and penalties must be paid in cash only. Adjusting these specific liabilities with ITC is considered an offence and may require reversal and cash payment.

Nilkesh Parmar

71 Points Posted on 17 July 2020

The same has clarified through press release issued in first week of August or July 2019. Where is has been clarified that the liability need to be paid in only. However, DRC-03 allow to set off liability through ITC. Hence, many companies have adjusted their huge liabilities through ITC only.

Vikasanand Gupta

110 Points Posted on 17 July 2020

Thanks Nilkesh ji, but discharging through itc is an offense in the light of the press release discussed by you. which is liable to be reverse and paid through cash only.
pls eleborate it

Vijayprakash P

776 Points Posted on 17 July 2020

Form DRC03 is filed for making a voluntary payment of outstanding liabilities u/s 73 &74 CGST Act. All payments need to be made either from ITC available in the Electronic Credit Ledger or cash balance available in the Electronic Cash Leger. But in the case of interest and penalties ITC utilisation is not available. It has to be compulsorily paid in cash.