CAN I UTILISE RCM PAID UNDER DRC03 IN AMNESTY SCHEME

[KERAGODEGOPALARAO ANANTHARAO]

THERE IS AN ORDER TO DISCHARGE RCM ON ROYALTY, FOR WHICH WE PREFERRED APPEAL, TO AVAIL THE BENEFIT OF AMNESTY SCHME WE HAVE TO PAY THE RCM IN DRC-03. iS IT CORRECT?

CAN I UTLISE THE RCM PAID UNDER DRC-03 ON FUTURE OUTPUT TAX?

OTHERWISE ANY OTHE WAY OUT?

KINDLY GUIDE ME SIR.

[Shilpi Jain]

Yes. Make payment through DRC-03 and file DRC-03A to adjust against the liability raised by order or SCN.

The eligibiltiy of RCM depends on whether your supplier is registered under GST or not and also the nature of expense.

[KERAGODEGOPALARAO ANANTHARAO]

This is RCM on Royalty paid to government by stone crushers 

[Sadanand Bulbule]

Dear all

Here is additional information:

DRC-03 payments are invariably related to voluntary payment under sec 17(5). However, by ignorance taxpayers are making payment of demand issued by the Dept in DRC-07 against DRC-03. Once, DRC-03 payment is acknowledged by the Dept in DRC-04, that payment cannot be adjusted towards any other liability. That is the end of DRC-03. If any DRC-03 is pending for acknowledgement, that can be used for availing the benefit Amnesty Scheme in SPL-02.

Any unacknowledged DRC-03 (paid either in cash or credit / either for any tax or tax under RCM determined as per DRC-07) can be used for SPL-02. To prevent the misuse of DRC-03, DRC_03A was brought in for SPL-02. The tax paid under RCM can also be used for filing of SPL-02, if it is not related to some other demand. Taxpayers must be cautious to pay RCM demand always in cash and other demand either through credit or cash. The system may allow (i.e. SPL-02) to adjust surplus credit towards the payment of demand of tax under RCM. However, the Dept may reopen such cases in future.

All orders passed under Section 128A are subject to the scrutiny of the AG and CAG.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir,                

Your one sentence, "That is the end of DRC-03" is the pillar of your comprehensive reply. 

[Sadanand Bulbule]

Sirji, I welcome your validation. 

[KASTURI SETHI]

Dear Sir,

Your reply at serial no.3 has solved problem of one of my clients. You have shown me the direction. . Prior to your reply, I was groping in the dark. I was in a dilemma on the issue raised by Sh.K. Anantharao Ji. 

[Sadanand Bulbule]

Sirji

Honestly speaking, there is no my contribution. I  have placed the ‘system position’ as it is. I don’t deserve such great words. 🙏🙏

[Shilpi Jain]

The government being not registered under GST you would be required to issue a self invoice now and then take the credit. Time limit for the credit will be counted from the date of this self invoice and not the date of supply of service (if any) by the government.

There is a circular also in this regard under GST.

AI Summary

RCM Payments Under DRC-03: Usage in GST Amnesty Scheme and Adjustments Explained with SPL-02 Insights A forum participant inquired about utilizing Reverse Charge Mechanism (RCM) payments made under DRC-03 for an amnesty scheme related to GST on royalties. Several responses clarified that payments through DRC-03 can be adjusted against liabilities if acknowledged by the department. However, once acknowledged, these payments cannot be used for other liabilities. Unacknowledged DRC-03 payments can be used for the amnesty scheme under SPL-02. Participants emphasized the importance of paying RCM demands in cash and noted that the government is not registered under GST, requiring self-invoicing for credit claims.