Introduction
The GSTN advisory dated 14.03.2026 highlights a major sensible concern confronted by assessees whereas submitting a primary attraction earlier than the Appellate Authority below the CGST Act, 2017. The problem typically arises the place an assessee has already made cost throughout investigation, scrutiny, audit, enforcement or pre-adjudication proceedings by way of Form GST DRC-03, however whereas submitting attraction towards the ultimate demand order, the GST portal nonetheless requires cost of the statutory pre-deposit.
The concern, subsequently, just isn’t merely whether or not cost has been made, however whether or not such cost is correctly mirrored towards the related demand entry within the Electronic Liability Register. This makes Form GST DRC-03A an vital compliance mechanism in attraction issues.
We have made our honest effort to cowl all related conditions on this article. However, if any question nonetheless stays after going by way of it, you might kindly be at liberty to contact me on the particulars talked about on the finish of the article.
Statutory framework governing the primary attraction below part 107
The proper to file first attraction is conferred by part 107(1) of the Central Goods and Services Tax Act, 2017, below which any particular person aggrieved by a call or order handed by an adjudicating authority might file an attraction earlier than the prescribed Appellate Authority inside three months from the date of communication of such choice or order.
Further:
- Section 107(4) empowers the Appellate Authority to condone delay as much as one extra month, supplied enough trigger is proven.
- Section 107(5) offers that the attraction shall be filed within the prescribed type and method.
- The procedural mechanism is laid down in Rule 108 of the CGST Rules, 2017, below which the attraction is filed in Form GST APL-01.
- A provisional acknowledgement is generated on the time of submitting, however the attraction is handled as correctly filed solely upon issuance of the ultimate acknowledgement in Form GST APL-02.
- Where required, licensed copy of the impugned order is to be submitted throughout the prescribed time in order that the unique submitting date is preserved.
Thus, part 107 learn with Rule 108 governs each the substantive proper of attraction and the procedural mode of its train.
Nature and extent of necessary pre-deposit below part 107(6)
Under part 107(6), submitting of attraction is topic to success of two necessary financial situations:
(i) Full cost of admitted legal responsibility
The appellant should pay in full such quantity of:
- tax,
- curiosity,
- wonderful,
- price, and
- penalty
as is admitted by him to be payable arising from the impugned order.
(ii) Statutory pre-deposit on disputed tax
In addition to the admitted quantity, the appellant should pay 10% of the remaining quantity of tax in dispute, topic to the statutory restrict prescribed in part 107(6)(b).
Once these situations are fulfilled, part 107(7) offers that restoration proceedings for the stability quantity shall be deemed to be stayed.
Therefore, the cost below part 107(6) just isn’t within the nature of a discretionary keep quantity. It is a statutory situation precedent for maintainability of the attraction and for availing the good thing about deemed keep towards restoration of the remaining demand.
The GST portal additionally follows this statutory structure and auto-computes the quantity required to be paid towards admitted legal responsibility and pre-deposit whereas submitting attraction.
Why is earlier cost by way of DRC-03 not mechanically thought-about for attraction
This is the central concern addressed within the GSTN advisory.
When a requirement order is issued, akin to in Form GST DRC-07, the system creates a corresponding Demand ID and posts the demand in Part II of the Electronic Liability Register. If the assessee thereafter makes use of the portal facility of “Payment towards Demand”, such cost is mechanically mapped to the related Demand ID. Accordingly, the system can recognise that cost whereas computing the stability payable and the attraction pre-deposit requirement.
However, the place the assessee had made cost earlier by way of Form GST DRC-03, such cost doesn’t mechanically get linked to the later demand order. Even although the quantity might have been genuinely paid throughout investigation or pre-adjudication stage, the portal doesn’t deal with it as cost towards the particular demand until it’s formally adjusted towards that demand.
As a consequence, whereas submitting attraction, the system might proceed to indicate the demand as unpaid or partially unpaid and will once more require cost of the statutory pre-deposit. This results in an avoidable state of affairs the place the assessee seems to be requested to pay twice, though in substance cost has already been made as soon as.
It is exactly to remedy this problem that Form GST DRC-03A was launched.
Legal foundation of Form GST DRC-03A: Notification No. 12/2024-Central Tax dated 10.07.2024
The formal authorized basis for this adjustment mechanism lies in Notification No. 12/2024-Central Tax dated 10.07.2024, by which sub-rule (2B) was inserted in Rule 142 of the CGST Rules, 2017 and Form GST DRC-03A was launched.
Rule 142(2B) offers that the place an quantity payable below part 52, part 73, part 74, part 76, part 122, part 123, part 124, part 125, part 127, part 129 or part 130 has been paid by way of Form GST DRC-03, however such quantity has not been credited towards the debit entry created for that demand within the Electronic Liability Register, the registered particular person might file Form GST DRC-03A electronically on the frequent portal.
Upon submitting of DRC-03A, the quantity already paid by way of DRC-03 is credited towards the related demand within the Electronic Liability Register as if such cost had initially been made towards that demand on the date of submitting of DRC-03 itself.
This just isn’t merely an administrative mechanism; it’s a statutory authorized fiction. The rule deems the sooner DRC-03 cost to have been made towards the demand itself. That deeming therapy is what allows the portal to contemplate the cost for attraction functions, together with computation of necessary pre-deposit.
Clarificatory impact of CBIC Circular No. 224/18/2024-GST dated 11.07.2024
The place below Rule 142(2B) was additional clarified by CBIC Circular No. 224/18/2024-GST dated 11.07.2024.
The Circular explains that in lots of instances assessees had inadvertently deposited quantities by way of DRC-03 as an alternative of creating cost towards the particular excellent demand mirrored within the Electronic Liability Register. It clarifies that after submitting Form GST DRC-03A, such earlier cost shall be handled as cost towards the stated demand from the date of unique DRC-03 cost itself.
Importantly, the Circular additionally clarifies that when such adjustment is made, the quantity could also be counted towards the pre-deposit requirement for:
- first attraction below part 107, and
- tribunal attraction below part 112, wherever relevant.
Thus, the later GSTN advisory of 14.03.2026 doesn’t introduce a brand new authorized precept. It solely operationalises and reiterates the statutory and procedural scheme already put in place in July 2024 by way of the above Notification and Circular.
Important restriction: DRC-03A can’t be filed after conclusion by way of DRC-05
An important proviso in Rule 142(2B) offers that the place proceedings have already been concluded by way of Form GST DRC-05 in respect of the cost made by way of DRC-03, Form GST DRC-03A can not thereafter be filed for such cost.
This restriction is critical. If the division has already handled the DRC-03 cost as culminating in closure of the proceedings by way of DRC-05, the regulation doesn’t allow subsequent re-allocation of the identical cost towards one other demand by utilizing DRC-03A.
Accordingly, earlier than advising submitting of DRC-03A, it’s essential to confirm whether or not the sooner DRC-03 cost has or has not already culminated in issuance of DRC-05.
Correct sensible treatment the place DRC-03 cost has been made however not linked by way of DRC-03A
Where the assessee has already made cost by way of DRC-03 and the identical has not been linked to the related demand whereas submitting attraction, the proper treatment is to not pay the identical quantity once more. The applicable statutory course is to make use of Form GST DRC-03A, topic to eligibility below Rule 142(2B).
In sensible phrases, the assessee ought to first confirm whether or not:
- the related demand is mirrored within the portal and is eligible for adjustment,
- the sooner cost was the truth is made by way of DRC-03,
- the demand continues to be excellent, and
- the bar mentioned in Section 7 doesn’t apply.
GST portal steerage additionally signifies that DRC-03A can be utilized in respect of excellent demand orders akin to DRC-07, DRC-08, MOV-09, MOV-11 and APL-04, topic to portal performance and situations. It additionally recognises conditions of:
- partial adjustment,
- one DRC-03 being adjusted towards a number of demand orders, and
- a number of DRC-03 funds being adjusted towards one demand order, although separate procedural steps could also be required.
Step-by-step plan of action for the assessee
The sensible sequence ought to ordinarily be as follows:
Step 1: Verify the demand place
Check whether or not the quantity already paid by way of DRC-03 is reflecting towards the related Demand ID within the Electronic Liability Register (Part II).
Step 2: If not mirrored, file Form GST DRC-03A
The type is mostly out there on the portal by way of:
Services → User Services → My Applications → Form GST DRC-03A
The assessee is ordinarily required to:
- enter the DRC-03 ARN,
- search and fetch the related cost particulars,
- choose the suitable Demand Order Number,
- fill the adjustment desk,
- validate the set-off particulars,
- add supporting paperwork the place required, and
- file the shape by way of DSC / EVC.
Upon profitable submitting, acknowledgment is generated and corresponding entries ought to mirror within the ledger.
Step 3: Recheck ledger and demand place
After submitting DRC-03A, confirm whether or not the adjustment is definitely showing:
- within the Electronic Liability Register, and
- within the Demand place / DRC-03 register, wherever related.
Step 4: File or proceed with attraction
Only after the adjustment is correctly mirrored ought to the assessee proceed to file the attraction in Form GST APL-01, in order that the portal accurately recognises the sooner cost whereas computing pre-deposit.
Position the place attraction has not but been filed
Where APL-01 has not but been filed, the advisable course is to first full DRC-03A adjustment and solely thereafter file the attraction, in order that the statutory pre-deposit requirement below part 107(6) is accurately mirrored from the outset.
Position the place attraction has already been filed with out linking DRC-03 by way of DRC-03A
(A) Where no discover has but been issued and no attraction order has been handed
As per portal steerage, in such a case the assessee could possibly:
- withdraw the attraction,
- first file DRC-03A, and
- thereafter refile the attraction with contemporary ARN.
This route is virtually safer the place the portal has did not recognise the sooner cost and the attraction has not progressed additional procedurally.
(B) Where discover has already been issued
If discover has already been issued within the attraction proceedings, portal FAQs point out that withdrawal is probably not out there thereafter.
In such a case, the prudent course could be:
- instantly file DRC-03A, if portal performance permits,
- protect acknowledgment, screenshots and ledger extracts, and
- file a written submission earlier than the Appellate Authority explaining that the sooner DRC-03 cost has now been regularised and linked below Rule 142(2B) and must be handled as legitimate compliance of the pre-deposit requirement to that extent.
This is very vital to stop technical rejection or antagonistic inference in a case the place substantive cost had already been made.
Exceptional conditions and drawback instances
(i) Demand order not showing in DRC-03A dropdown
If the related demand order quantity just isn’t showing whereas trying DRC-03A submitting, one ought to confirm whether or not it’s a correct system-generated demand order. In sure instances, guide or improperly mirrored orders might require intervention by the jurisdictional officer or nodal officer so {that a} correct system-generated demand reference turns into out there.
(ii) DRC-05 already issued
Where proceedings in respect of the sooner DRC-03 cost have already concluded by way of DRC-05, the restriction mentioned in Section 7 will apply.
(iii) Technical portal problem
Where portal error persists regardless of eligibility, grievance could also be raised on the GST grievance mechanism, whereas concurrently preserving all proof of tried compliance.
Practical guidelines earlier than submitting DRC-03A
Before endeavor DRC-03A adjustment, the assessee or skilled consultant ought to hold prepared:
1. DRC-03 ARN and date
2. Copy of the related demand order akin to DRC-07 or different eligible order
3. Extract/screenshot of Electronic Liability Register Part II
4. Working of quantity already paid and quantity proposed to be adjusted towards the related demand
5. Copy of APL-01 ARN, if attraction has already been filed
6. Status of attraction proceedings, together with whether or not any discover has already been issued
7. Details of whether or not any DRC-05 has been issued in relation to the sooner DRC-03 cost
Conclusion
In skilled and sensible phrases, the GSTN advisory dated 14.03.2026 must be handled as an vital procedural warning for assessees and practitioners. The regulation below part 107 of the CGST Act, 2017 requires cost of admitted legal responsibility and prescribed pre-deposit earlier than the primary attraction may be successfully maintained. However, the place an assessee has already deposited an quantity earlier by way of Form GST DRC-03, such cost won’t mechanically be recognised for attraction functions until it’s correctly mapped to the related portal-generated demand.
The statutory basis for this adjustment is present in Rule 142(2B) inserted by Notification No. 12/2024-Central Tax dated 10.07.2024, learn with CBIC Circular No. 224/18/2024-GST dated 11.07.2024. Therefore, earlier than submitting or pursuing a primary attraction towards a requirement order akin to Form GST DRC-07, the assessee ought to confirm whether or not the sooner DRC-03 cost is showing towards the related Demand ID within the Electronic Liability Register. If not, Form GST DRC-03A have to be filed first, topic to the restriction mentioned above.
The right compliance sequence, in substance, is:
Earlier cost by way of DRC-03 → adjustment by way of DRC-03A → reflection towards Demand ID in Electronic Liability Register → submitting/refiling of attraction in APL-01
That is the right authorized and procedural route. Duplicate cost shouldn’t ordinarily be made merely as a result of the portal has not but recognised the sooner cost.
The writer may also be reached at varunmukeshgupta96@gmail.com
