VOLUNTARY PAYMENT OF TAX UNDER GST LAWS

[Mr. M. GOVINDARAJAN]

Demand of tax

Section 73 of the CGST Act, 2017 (‘Act’ for short) provides for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful-misstatement or suppression of facts.

Section 74 of the Act provides for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by the reason of fraud or any willful-misstatement or suppression of facts.

Issue of notice

Both section 73(1) and section 74(1) gives powers to the proper officer to serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon and a penalty equivalent to the tax specified in the notice.

Issuing of Statement

Where a notice has been issued for any period, the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1), on the person chargeable with tax.   The service of statement shall be deemed to be service of notice under 73(1)/74(1), subject to the condition that the grounds relied upon in the said statement for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.

Voluntary payment

Payment on Voluntary Basis is a facility given to tax payers to make payment u/s 73 or 74 of the CGST Act, 2017.  The pre-conditions to make voluntary payment are:

• In case, voluntary payment is made before issue of SCN-

• Show Cause Notice under determination of tax should not have been issued.

• In case, voluntary payment is made after issue of SCN or statement-

• 30 days’ time has not lapsed since SCN is issued.

GST Portal does not allow for making partial payments against a liability raised in a SCN. Complete payment of the amount being demanded in SCN has to be made.

Voluntary payment before issue of SCN

Section 73(5) provides that the person chargeable with tax may, before service of notice or the statement, pay the amount of tax along with interest payable thereon on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.   The proper officer, on receipt of such information, shall not serve any notice or the statement, in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made there under.

Section 74(5) provides that the person chargeable with tax may, before service of notice, pay the amount of tax along with interest payable and a penalty equivalent to 15% of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.   The proper officer, on receipt of such information, shall not serve any notice in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made there under.

Voluntary payment after issue of SCN

Section 73(8) provides that where any person chargeable with tax pays the said tax along with interest within 30 days of issue of show cause notice, no penalty shall be payable. All proceedings in respect of the said notice shall be deemed to be concluded.

Section 74(8) provides that where any person chargeable with tax pays the said tax along with interest payable  and a penalty equivalent to 25% of such tax within 30 days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded.

Acknowledgement

The person chargeable with tax shall inform the proper officer of such payment in FORM GST DRC-03. The proper officer shall issue an acknowledgement, accepting the payment made by the said person in FORM GST DRC–04.

Procedure for informing voluntary payment

To make payment against the liability (tax, interest & penalty) based on self-ascertainment of tax before issuance of SCN or within 30 days of SCN under determination of tax, perform following steps-

• Access the www.gst.gov.in URL. ;
• The GST Home page is displayed.
• Login to the GST Portal with valid credentials.
• Click the Services > User Services > My Applications command.

There are three scenarios as detailed below-

• The person chargeable with tax has not made any payment and does not have the payment reference number.
• In case the payment reference number is generated and unutilized and taxpayers comes for filing within 30 minutes of generation of payment reference number.
• In case the payment reference number is generated and utilized and taxpayer comes for filing after 30 minutes of generation of payment reference number.

In case no payment is made

• Select the Intimation of Voluntary Payment - DRC - 03 from the Application Type drop-down list.
• Click the NEW APPLICATION button.
• Then ‘The Intimation of payment made voluntarily or made against the show cause notice (SCN)’ page will be  displayed.
• Application for intimation of voluntary payment can be saved at any stage of completion for a maximum time period of 15 days.
• If the same is not filed within 15 days, the saved draft will be purged from the GST database. 
• To view the saved application, navigate to Services > User Services > My Saved Applications option.
• Select the Cause of Payment from the drop-down list.

•  In Case of Voluntary Payment - Payment date is auto-populated and cannot be edited.
•  In Case of SCN-

• Select Manual Entry from the SCN Reference Number drop-down list.
• Select the SCN Issue Date using the calendar. (SCN Issue date should be within last 30 days.)

• Select the Section Number from the drop-down list.(Section 73(8)/74(8).
• Select the Financial Year from the drop-down list.
• Select the From date and To Date for Overall tax Period from the drop-down list.
• Enter the Details of payment made including interest, penalty and others.
• Use the scroll bar to move to the right to enter more details. (One can click the DELETE or ADD button to delete or add more payment details.)
• Click the PROCEED TO PAY button.
• The Voluntary Payment page is displayed.
• Then Liability details are displayed as shown in the table.
• The cash available as on date are shown in the Cash Ledger.
• Interest and penalty amount shall be paid out of cash ledger only.
• Use the scroll bar to move to the right to enter the amount to be paid through cash against the liability.
• The credit ledger balance will also be shown.
• Use the scroll bar to move to the right to enter the amount to be paid through ITC against the liability.
•  Once the amount has been entered, click the SET-OFF button.
• A confirmation message is displayed. Click the OK button.
•  A success message is displayed. Payment Reference Number (PRN) is displayed on the screen. Click the OK button
• The Intimation of payment made voluntarily or made against the show cause notice (SCN) page is displayed.
•  Payment Reference Number is populated.
• If PRN is not available, the same can be got from Electronic Liability Register under Services > Ledgers > Electronic Liability Register.
•  Click the PREVIEW button to preview the draft in PDF format.
•  The draft statement in PDF format is displayed.
•  In the Reasons if any field, enter the reasons.
• Click the Choose File button to upload any document.
• Select the Verification checkbox.
• Select the Name of Authorized Signatory from the drop-down list.
• . In the Place field, enter the place where form is filled.
•  Click the FILE button.
• Click the FILE WITH DSC or FILE WITH EVC button  

• FILE WITH DSC - Select the certificate and click the SIGN button.
• FILE WITH EVC -  Enter the OTP sent on the e-mail and mobile phone number of the Authorized Signatory registered at the GST Portal, and click the VALIDATE OTP button.

• The success message is displayed. ARN is generated and displayed.
• SMS and email will be sent to the taxpayer intimating ARN and successful filing of the Form.

In case the PRN is generated and unutilized and taxpayers comes for filing within 30 minutes of generation of PRN

• Select the Intimation of Voluntary Payment - DRC - 03 from the Application Type drop-down list.
• Click the NEW APPLICATION button.
• The Intimation of payment made voluntarily or made against the show cause notice (SCN) page is displayed.
•  If PRN is generated and taxpayer comes for filing within 30 minutes of generation of PRN, then taxpayer has to enter PRN and click on ‘Get payment details’-

• If entered PRN is already utilized, then system will display error message to taxpayer and ask him/ her to enter unutilized PRN.
• If entered PRN is unutilized, then system will auto-populate the screens with the payment details, then taxpayer can file the form with DSC/ EVC.

• Select Yes for 'Have you made the payment option'.
•  In the Payment Reference Number field, enter the PRN which was generated after making the payment.(  If PRN is not available, you can get the same from Electronic Liability Register under Services > Ledgers > Electronic Liability Register.)
•  Click the Get Payment Details link.
• The details in the page are auto-populated based on the payment done earlier w.r.t PRN mentioned. 
• Click the PREVIEW button to preview the draft in PDF format.
•  The draft statement in PDF format is displayed.

•   In the Reasons if any field, enter the reasons.
• Click the Choose File button to upload any document.
• Select the Verification checkbox.
• Select the Name of Authorized Signatory from the drop-down list.
• In the Place field, enter the place where form is filled.
•  Click the FILE button.
• Click the FILE WITH DSC or FILE WITH EVC button  

• FILE WITH DSC - Select the certificate and click the SIGN button. (DSC is compulsory for companies and LLPs)
• FILE WITH EVC -  Enter the OTP sent on the e-mail and mobile phone number of the Authorized Signatory registered at the GST Portal, and click the VALIDATE OTP button.

• The success message is displayed. ARN is generated and displayed.
• SMS and email will be sent to the taxpayer intimating ARN and successful filing of the Form.

In case the PNR is generated and utilized and taxpayer comes for filing after 30 minutes of generation of PRN

• Select the Intimation of Voluntary Payment - DRC - 03 from the Application Type drop-down list.
• Click the NEW APPLICATION button.
•  The Intimation of payment made voluntarily or made against the show cause notice (SCN) page is displayed.

•  If PRN is generated and taxpayer comes for filing within 30 minutes of generation of PRN, then taxpayer has to enter PRN and click on ‘Get payment details’-

• If entered PRN is already utilized, then system will display error message to taxpayer and ask him/ her to enter unutilized PRN.
• If entered PRN is unutilized, then system will auto-populate the screens with the payment details, then taxpayer can file the form with DSC/ EVC.

• Select Yes for 'Have you made the payment option'.
•  In the Payment Reference Number field, enter the PRN which was generated after making the payment.(  If PRN is not available, you can get the same from Electronic Liability Register under Services > Ledgers > Electronic Liability Register.)

• Click the Get Payment Details link.
• The details of payment are not auto-populated based on the payment done earlier w.r.t PRN mentioned in case payment has been made before 30 minutes. You need to enter the data manually again. (System will check that whether total amount entered by the taxpayer matches the payment amount or not. If yes, then system will accept the intimation form. If No, then system will display an error message saying that total amount does not match with payment date.)
• Select the Cause of Payment from the drop-down list.
• In Case of Voluntary Payment Date is auto-populated and cannot be edited.
• In Case of SCN-
• Select Manual Entry from the SCN Reference Number drop-down list.
• b. Select the SCN Issue Date using the calendar.

•  Select Manual Entry from the SCN Reference Number drop-down list.\
• . Select the SCN Issue Date using the calendar.(Issue date should be within last 30 days).

• Select the Section Number from the drop-down list.[73(8)/74(8)]
• Select the Financial Year from the drop-down list.
• Select the From date and To Date for Overall tax Period from the drop-down list.
• Enter the Details of payment made including interest, penalty and others.
• Use the scroll bar to move to the right to enter more details.
•  The taxpayer can click the DELETE or ADD button to delete or add more payment details.
• Click the PREVIEW button to preview the draft in PDF format.
•  The draft statement in PDF format is displayed.
•  In the Reasons if any field, enter the reasons.
• Click the Choose File button to upload any document (File with PDF or JPEG format is only allowed.  Maximum 4 files and 5 MB for each file allowed)
•  Select the Verification checkbox.
• Select the Name of Authorized Signatory from the drop-down list.
•  In the Place field, enter the place where form is filled.
•  Click the FILE button.
• Click the FILE WITH DSC or FILE WITH EVC button  

• Click the FILE WITH DSC or FILE WITH EVC button  

• FILE WITH DSC - Select the certificate and click the SIGN button. (DSC is compulsory for companies and LLPs)
• FILE WITH EVC -  Enter the OTP sent on the e-mail and mobile phone number of the Authorized Signatory registered at the GST Portal, and click the VALIDATE OTP button.

• The success message is displayed. ARN is generated and displayed.
• SMS and email will be sent to the taxpayer intimating ARN and successful filing of the Form.

Downloading the duly filled DRC – 03 form

• Access the www.gst.gov.in URL. The GST Home page is displayed.
• Login to the GST Portal with valid credentials.
•  Click the Services > User Services > My Applications command.
• Select the Intimation of Voluntary Payment - DRC - 03 from the Application Type drop-down list.
• Select the From and To date using the calendar.
• Click the SEARCH button.
• The search results are displayed. Click the ARN link.
• Click the View link.
• The Form GST DRC-03 is downloaded in PDF format.

Acknowledgement

• Upon filing of Form GST DRC-03, the tax officer will issue an Acknowledgement in Form GST DRC-04(Acknowledgement of Acceptance of voluntary payment).
• There is no bar on making another payment on voluntary basis by a taxpayer, pending issuance of acknowledgement by the tax officer.

Reference:

www.gst.gov.in