GST Advisory: How to Link DRC-03 Payment with Demand ID Before Filing Appeal — GSTN Clarifies

The GST Network (GSTN) has issued an important advisory clarifying the
correct procedure for applying pre-deposit payments made through Form
GST DRC-03 when filing an appeal before the First Appellate Authority.
This advisory addresses a common problem faced by taxpayers who have
already paid amounts via DRC-03 but are still being asked by the portal
to make a fresh pre-deposit at the time of filing the appeal.

The Problem

Many taxpayers voluntarily pay amounts during the investigation stage
using Form GST DRC-03. However, when they subsequently file an appeal
against a demand order, the GST portal continues to demand payment of
pre-deposit — even where the amount already paid through DRC-03 exceeds
the required pre-deposit amount.

Why Does This Happen?

When a demand order such as Form GST DRC-07 is issued, a Demand ID is
created in Part II of the Electronic Liability Register on the GST portal.
Payments made through the “Payment towards Demand” functionality are
automatically linked to this Demand ID. However, payments made through
Form GST DRC-03 are not automatically linked to any Demand ID and therefore
do not appear as adjusted against the demand in the Electronic Liability
Register.

When a taxpayer files an appeal, the GST system auto-calculates the
required amount (Admitted Amount + Pre-Deposit) and checks only the
Electronic Liability Register for prior payments against that Demand ID.
Since DRC-03 payments are not reflected there, the system treats the
pre-deposit as unpaid.

The Solution — Form GST DRC-03A

To ensure that a payment made through Form GST DRC-03 is counted against
a specific demand order, the taxpayer must link the DRC-03 payment to
the relevant Demand ID by filing Form GST DRC-03A on the
GST portal.

Once DRC-03A is filed:

• The DRC-03 payment gets mapped to the corresponding demand order
• The entry becomes available in the Electronic Liability Register
• At the time of filing the appeal, the system recognises the payment and does not require any additional amount to be paid as pre-deposit

GSTN’s Advisory to Taxpayers

GSTN has accordingly advised all taxpayers to file Form GST DRC-03A before filing an appeal, wherever a payment has been made through
DRC-03 against a demand order. The manual for filing DRC-03A is available
on the GST portal at www.gst.gov.in.

Practical Steps to Follow

• If you have paid any amount through Form GST DRC-03 during investigation or voluntarily against a demand — do not assume it will be automatically adjusted at the time of appeal
• Before filing your appeal (APL-01), log in to the GST portal and file Form GST DRC-03A to link your DRC-03 payment with the relevant Demand ID
• Once mapped, the portal will recognise the payment and will not prompt you for fresh pre-deposit payment
• Only then proceed to file your appeal

Why This Matters

Missing this step can result in double payment of pre-deposit — a
significant financial burden especially in cases involving large demands.
Taxpayers who have already paid excess amounts through DRC-03 and were
forced to pay pre-deposit again may now use this advisory to seek
appropriate credit or rectification.

If you have received a demand order and are planning to file an appeal,
our team can assist you with the complete process — from DRC-03A filing
to appeal drafting and representation. Contact us for a consultation.