Form GST DRC-20 lets a taxpayer who cannot pay a GST demand in one go apply to defer the payment or pay it in monthly instalments. The Commissioner may allow up to 24 monthly instalments, with interest charged on the outstanding amount, easing cash-flow pressure while keeping the dues on track.
Form GST DRC-20 allows taxpayers to request either a deadline extension for settling outstanding tax demands or approval to pay in instalments. This guide covers eligibility criteria, the instalment and interest framework, and the complete online filing process on the GST portal.
What Is Form GST DRC-20?
GST DRC-20 is an application form submitted to the Commissioner requesting either payment deferment (an extension of the due date for settling an outstanding tax demand) or installment payments (approval to pay the demand amount in monthly installments up to 24 months). The form is available under the User Services or Payments section on the GST portal.
Who Should File DRC-20?
Taxpayers who have an outstanding GST demand for recovery but cannot settle the full amount in a lump sum should file DRC-20. The form enables structured payment through deferment or installments rather than a single large payment.
Filing Deadline
DRC-20 can be filed at any time before a Recovery ID is generated on the GST portal. Once recovery proceedings are initiated, the deferment option is no longer available.
Eligibility Criteria
To be eligible for filing DRC-20, the following conditions must be met:
• An outstanding demand must exist under GST
• The demand must not originate from returns and must be recorded in Part B of the Electronic Liability Register
• The demand amount must be Rs. 25,000 or above (deferment is not available for smaller amounts)
• The taxpayer must not have previously defaulted on the payment for which recovery proceedings are currently active
Interest on Deferred Payments
| Parameter | Detail |
| Interest rate | 18% per annum |
| Legal basis | Section 50 of the CGST Act |
| Applicability | Both deferred and installment payments |
| Calculation | From the original due date until payment |
Step-by-Step Guide to Filing DRC-20
Step 1: Access the Application
Log in to the GST portal, navigate to Services> User Services> My Applications. Alternatively, go to Services, then Payments, then Application for Deferred Payments/Payment in Installments. Select the application type from the dropdown and click New Application.
Step 2: Select the Demand ID
Select the relevant Demand ID from the dropdown. The system auto-populates outstanding demand details, including tax period information. An error message will display if the demand amount is below Rs. 25,000, if a prior application already exists for the selected Demand ID, or if a Recovery ID has already been generated.
Step 3: Choose Payment Type
Select between monthly installments or deferred payment. For monthly installments, enter the desired number of months (up to 24) and click Calculate to view auto-computed installment amounts including interest. For deferred payment, select a preferred due date from the calendar.
Step 4: Upload Supporting Documents
Provide a brief description for each supporting document, then use the Choose File option to upload them. Optionally, enter reasons for your application in the designated field.
Step 5: Verify and Preview
Select the authorized signatory, agree to the declaration by ticking the checkbox, and enter the location. The Designation/Status field auto-populates. Click the Preview tab to review all entered details before submission.
Step 6: Submit the Application
Review the preview thoroughly and click Submit. Complete the filing using DSC or EVC. Upon successful submission, a provisional acknowledgment page is displayed. SMS and email confirmation with the Application Reference Number (ARN) is sent to the registered contact details. The acknowledgment can be downloaded for records.
After submission, the Commissioner reviews the application and issues an order either granting or rejecting the request. If granted, the taxpayer must adhere to the approved payment schedule. Missing an installment may trigger immediate recovery proceedings for the full outstanding amount.
Installment vs Deferred Payment Comparison
| Feature | Monthly Installments | Deferred Payment |
| Maximum period | Up to 24 months | Single extended due date |
| Payment structure | Equal monthly amounts with interest | Lump sum on the deferred date |
| Interest applicability | 18% p.a. on each installment from the original due date | 18% p.a. from the original due date to the deferred date |
| Flexibility | Spreads financial burden across months | Provides a one-time extension |
| Best suited for | great demands where cash flow is limited | Short-term liquidity issues with expected inflow |
Choosing between installments and deferred payment depends on the taxpayer’s financial situation. For high demands, installments spread the cash outflow and reduce immediate financial strain. In situations where a specific future date will bring in sufficient funds (such as a contract payment or seasonal revenue), a deferred payment may be more practical, as it avoids the administrative overhead of monthly tracking.
In both cases, the 18% interest applies from the original due date, not from the date of the DRC-20 application. This means that delays in filing the application increase the total interest burden regardless of whether installments or deferment is chosen.
Common Reasons for DRC-20 Applications
Taxpayers typically file DRC-20 in situations where a great demand arises from an assessment or audit that exceeds available cash flow, where seasonal business patterns make lump-sum payment impractical, where the demand is under dispute but partial compliance is preferred to avoid recovery proceedings, or where unexpected financial constraints prevent immediate settlement of the full amount.
In each case, the application should clearly state the reasons and provide supporting documentation, such as financial statements, bank records, or business projections, demonstrating the inability to pay in full, along with the proposed payment plan.
Key Terms
• DRC-20: Application form for GST payment deferment or installment arrangement
• Electronic Liability Register: Digital register on the GST portal recording a taxpayer’s outstanding GST liabilities
• Recovery ID: Identifier generated when GST recovery proceedings are formally initiated against a taxpayer
• ARN: Application Reference Number, a unique ID assigned upon successful submission of the DRC-20 form
• Section 50: CGST Act provision governing interest on delayed GST payments at 18% per annum
| Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for advice specific to your situation. |
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Frequently Asked Questions
Q1: What is Form GST DRC-20?
DRC-20 is an application form that allows taxpayers to request a payment deferral or an installment payment for outstanding GST tax demands.
Q2: How many installments can be granted?
The Commissioner can approve up to 24 monthly installments.
Q3: What interest rate applies to deferred payments?
Deferred and installment payments attract 18% annual interest under Section 50 of the CGST Act, calculated from the original due date.
Q4: What is the minimum demand amount for DRC-20?
Demands below Rs. 25,000 are not eligible for deferment or installment payment.
Q5: When must DRC-20 be filed?
DRC-20 must be filed before a Recovery ID is generated on the GST portal. Once recovery proceedings begin, the deferment option is no longer available.
Frequently Asked Questions (FAQ)
What is Form GST DRC-20?
DRC-20 is the application a taxpayer files to request deferment of payment or payment of GST dues in instalments, when paying the full amount at once is not feasible.
How many instalments can I get under DRC-20?
The Commissioner may allow the dues to be paid in monthly instalments, up to a maximum of 24, subject to conditions and the taxpayer’s compliance record.
Is interest charged on instalment payments?
Yes. Interest is charged on the outstanding amount for the period of deferment, in addition to paying the principal dues in instalments.
Who can apply for payment in instalments?
A taxpayer with confirmed GST dues, other than the amount of self-assessed tax shown in returns, can apply, and approval is at the discretion of the Commissioner.
