DRC 03 payment method

To pay the interest on ITC reversal via DRC-03, follow these steps:

Step-by-Step Process 1. *Login to GST Portal*: Log in to the GST portal with your credentials. 

2. *Navigate to DRC-03*: Go to the "Services" tab > "User Services" > "Payment of Tax" > "DRC-03". 

3. *Fill in Details*: Fill in the required details, including: - 

*Act*: Select "Goods and Services Tax". - *Tax Period*: Enter the tax period for which the interest is payable. - 

*Tax Liability*: Select "Interest" as the reason for payment. - *Interest Amount*: Enter the interest amount calculated (18% of the ITC reversal amount). 4. 

*Generate Challan*: Generate the challan and proceed to make the payment. 5. *Make Payment*: Make the payment using the preferred payment mode (e.g., net banking, credit/debit card). Additional Considerations - 

*Verify Calculation*: Ensure that the interest calculation is correct and verify it with your GST consultant or accountant if needed. -

 *Keep Records: Keep a record of the payment, including the challan and payment confirmation, for future reference. -

Respond to Notice*: Respond to the GST department's notice, providing details of the payment made, to avoid any further action [1]. If you need further assistance or clarification, feel free to ask.

Form DRC-03 is used to make voluntary payments of GST, interest, and penalty ,  either before a show cause notice (SCN) or after receiving one.

Here is how the payment works:

Step 1: Log into the GST portal. Go to Services > User Services > My Applications > Show Cause Notice > Initiate Payment (or directly via Ledgers > Payment of Tax > DRC-03 for voluntary payment).

Step 2: Select the reason for payment: pre-SCN voluntary payment (Section 73/74/74A), or payment against DRC-01.

Step 3: For TAX and INTEREST: You can use the ITC balance in your Electronic Credit Ledger (IGST credit can offset CGST+SGST liability in the prescribed order).

For PENALTY: Must be paid from the CASH ledger. ITC CANNOT be used for penalty payment.

Step 4: After payment, the DRC-03 acknowledgement is available under User Services > My Applications.

IMPORTANT: If you are paying within 30 days of DRC-01 (SCN) receipt under Section 74 (fraud cases), penalty is 25% of tax. If you pay before the SCN under Section 73, no penalty is due.

This [GST DRC-01 notice guide](https://taxgarden.in/blog/gst-drc-01-show-cause-notice-reply-drc-06-guide-india-2026) explains the full DRC process including Section 73/74/74A penalty reduction steps.