DRC-03 Covering Letter Format 2026
To,
{{officer_designation}}
Date: 1 October 2026
Intimation of Payment Made through FORM GST DRC-03
Registered person: {{client_name}} | GSTIN: {{client_gstin}}
Address: {{client_address}}
Tax period / Financial Year: {{tax_period}}
Cause of payment: {{cause_of_payment}}
Reference, if any: dated
FORM GST DRC-03: ARN {{drc03_arn}} dated {{drc03_date}}
Sir / Madam,
1. We write to inform you, as required by section {{payment_section}} of the Central Goods and Services Tax Act, 2017 read with Rule 142 of the CGST Rules, 2017, that we have paid the amounts set out below and have intimated the payment on the common portal in FORM GST DRC-03 bearing the ARN cited above.
2. Nature of the liability: ____________ [state in two or three lines what the payment is for — e.g. 'output tax on invoices of March 20__ reported in FORM GSTR-1 but omitted from FORM GSTR-3B, noticed while preparing the annual return'; 'reversal of input tax credit on ____ found ineligible under section 17(5)'; 'tax under reverse charge on ____ services for FY 20__-__'].
3. Details of payment:
| Tax period | Act | Tax / Cess (₹) | Interest (₹) | Penalty, if applicable (₹) | Total (₹) | Ledger utilised (Cash / Credit) | Debit entry no. and date |
|---|
| ____________ | IGST | | | | | | |
| ____________ | CGST | | | | | | |
| ____________ | SGST / UTGST | | | | | | |
| ____________ | Cess | | | | | | |
| Total | | | | | | |
4. Interest has been computed under section 50 at eighteen per cent. per annum from ____________ [the day after the due date of payment of the tax; for credit wrongly availed and utilised, the date of utilisation under Rule 88B(3)] to ____________ [date of payment], as per the working in the Annexure.
Request
[Use the one paragraph that matches the stage at which the payment is made and delete the others.]
5A. Payment before any show cause notice — case not involving fraud. The tax has been ascertained by us on our own / as ascertained by you, and has been paid with interest before service of any notice. In terms of section 73(5) and (6) [for FY 2024-25 onwards: section 74A(8)(i)], no notice is to be served in respect of the tax so paid or any penalty. It is requested that the payment be taken on record and the matter be treated as closed.
5B. Payment before show cause notice — where fraud, wilful misstatement or suppression is alleged. Without admitting the allegation, the tax has been paid with interest and a penalty equivalent to fifteen per cent. of the tax, before service of notice. In terms of section 74(5) and (6) [for FY 2024-25 onwards: section 74A(9)(i)], no notice is to be served in respect of the tax so paid. It is requested that the payment be taken on record and the matter be treated as closed.
5C. Payment after show cause notice, within the closure period. The tax demanded in the show cause notice cited above has been paid with interest [and penalty of twenty-five per cent. of the tax] within ____________ days of issue of the notice — that is, within the thirty days allowed by section 73(8) / section 74(8) [for FY 2024-25 onwards: within the sixty days allowed by section 74A(8)(ii) / section 74A(9)(ii)]. All proceedings in respect of the notice are deemed to be concluded, and it is requested that an intimation in FORM GST DRC-05 be issued under Rule 142(3).
5D. Payment against an intimation or observation. The payment is made in response to ____________ [the intimation in Part A of FORM GST DRC-01A / DRC-01B / DRC-01C; the scrutiny notice in FORM GST ASMT-10; the audit observation dated ____]. The ARN has also been reported in ____________ [Part B of the respective form / the reply in FORM GST ASMT-11]. It is requested that the payment be accepted and no further proceedings be initiated on the point.
5E. Payment after the order, with reduced penalty. The tax determined in the order no. ____________ dated ____________ has been paid with interest and a penalty equivalent to fifty per cent. of the tax within thirty days of communication of the order under section 74(11) [for FY 2024-25 onwards: within sixty days under section 74A(9)(iii)]. All proceedings in respect of the notice are deemed to be concluded, and it is requested that the demand be closed accordingly.
6. [Optional — payment under protest] The payment of ₹ ____________ under ____________ is made under protest and without prejudice to our contention that the amount is not payable, for the reasons that ____________. We reserve the right to contest the liability in adjudication or appeal and to claim refund of the amount. The words "paid under protest" have also been entered in the "Reasons" field of FORM GST DRC-03.
7. [Optional — demand order already exists] The above payment was intended towards the demand created by order no. ____________ dated ____________ (FORM GST DRC-07 / DRC-08 / APL-04) but was made through FORM GST DRC-03 instead of against the demand in the electronic liability register. An application in FORM GST DRC-03A has been filed on ____________ vide ARN ____________ under Rule 142(2B) for adjustment of the payment against the said demand. It is requested that the liability register be updated and no recovery be made for the amount so adjusted.
8. Copies of FORM GST DRC-03 and the acknowledgement in FORM GST DRC-04 are enclosed.
Thanking you,
Yours faithfully,
Place: __________________
Date: 1 October 2026
For {{client_name}}
_______________________________
{{signatory_name}}
{{signatory_designation}} — Authorised Signatory
Encl.: FORM GST DRC-03; FORM GST DRC-04; interest working; FORM GST DRC-03A acknowledgement, if any
Annexure — Working of Tax and Interest
| Sl. | Tax period | Particulars of short payment / excess credit | Tax (₹) | Due date / date of utilisation | Date of payment | Days of delay | Interest at 18% (₹) |
|---|
| 1 | | | | | | | |
| 2 | | | | | | | |
| 3 | | | | | | | |
| | Total | | | | | |
Note — FORM GST DRC-03A (adjustment of a DRC-03 payment against a demand order)
- When it applies: tax, interest or penalty payable under a demand (sections 52, 73, 74, 74A, 76, 122, 123, 124, 125, 127, 129 or 130) has been paid through FORM GST DRC-03, so the debit entry for that demand in the electronic liability register (FORM GST PMT-01, Part II) still shows as outstanding. Typical cases: pre-deposit or payment made through DRC-03 during investigation or before the order was uploaded.
- What it does: on filing FORM GST DRC-03A under Rule 142(2B), the amount paid through DRC-03 is credited against the debit entry for the demand, as if it had been paid towards that demand on the date of the DRC-03.
- What you enter: the ARN of the DRC-03 and the reference number of the demand order (FORM GST DRC-07, DRC-08 or APL-04). The portal fills in the rest from the DRC-03 and the demand order; check both sets of figures before filing.
- When it cannot be used: where an intimation in FORM GST DRC-05 has already been issued concluding the proceedings in respect of that DRC-03 payment (proviso to Rule 142(2B)).
- The undertaking: the form carries an undertaking that the DRC-03 payment was intended for that demand and has not been used against any other, with liability to repay with interest and to penal action under section 122(1)(x) if the declaration is false.
- Drafting hint: DRC-03 is irreversible once filed — there is no revision facility. Check the tax period, the Act-wise split and the section selected before submitting, and save the draft first.
- Drafting hint: the section matters more than the amount. A payment under section 73(5) carries no penalty; one under section 74(5) carries fifteen per cent. Do not select a fraud provision on the portal merely because the officer suggests it.
- Drafting hint: the no-penalty closure under section 73 and section 74A(8) is not available where self-assessed tax, or tax collected from customers, was not paid within thirty days of its due date (section 73(11) / section 74A(11)). In that case the ten per cent. penalty is payable even on voluntary payment.
- Drafting hint: if the officer considers the payment short, a notice can still issue for the shortfall (section 73(7) / 74(7) / 74A(10)). Annex the working so the basis of the amount is on record.
- Drafting hint: the notified form lists the causes of payment as audit, investigation, voluntary, SCN and others; the portal drop-down carries further specific options. Pick the one that matches the trigger, since it decides which reference number the portal asks for.
