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

Reverse charge mechanism payments: unacknowledged DRC-03 can be used in amnesty; acknowledged payments cannot under GST.
DRC-03 payments are voluntary deposits; once acknowledged by the department (DRC-04) they cannot be adjusted against other liabilities. Unacknowledged DRC-03 payments can be used in the amnesty process (SPL-02) and DRC-03A facilitates adjustment for amnesty filings. RCM credit eligibility depends on supplier registration and expense nature; if the supplier is an unregistered government entity, the recipient must issue a self-invoice and the credit time limit runs from that self-invoice date.