TaxTMI 
TaxTMI 
We normally pay DRC-3 using Electronic Cash Ledger only. In what circumstances, DRC-3 can be paid using Electronic Credit Ledger? For Annual return, it is compulsory to make payment through cash. Can we use Credit Ledger for any other DRC-3 payments or Annual return payment?
Payment of DRC-3 using Electronic Credit Ledger
30 Nov 2020 
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Use of Input Tax Credit may pay DRC 3 liabilities arising from ineligible credit or where circulars permit such use.
Additional liabilities shown in FORM DRC 03 for Annual Return are generally payable from the electronic cash ledger as per the notification, but where the liability arises from ineligible or disallowed Input Tax Credit the form and practice permit payment from the electronic credit ledger; Board circulars allowing credit ledger use for certain non standard purposes support that position notwithstanding statutory provisions treating claimed credit as provisional and limiting ITC use to output tax. (AI Summary)
Additional liabilities shown in FORM DRC 03 for Annual Return are generally payable from the electronic cash ledger as per the notification, but where the liability arises from ineligible or disallowed Input Tax Credit the form and practice permit payment from the electronic credit ledger; Board circulars allowing credit ledger use for certain non standard purposes support that position notwithstanding statutory provisions treating claimed credit as provisional and limiting ITC use to output tax. (AI Summary)