The GSTN has issued an Advisory dated 14.03.2026, clarifying issues faced by taxpayers regarding pre-deposit payment while filing appeals before the First Appellate Authority under the GST law. It is advised that the taxpayers who have made payments through Form GST DRC-03 should file Form GST DRC-03A to link such payments with the relevant Demand ID before filing an appeal. This ensures that the pre-deposit requirement is correctly adjusted and duplication of payment is avoided. The detailed procedure for linking DRC-03 with the Demand ID through Form GST DRC-03A is available in the manual on the GST portal.
This is discussed as under:
Issue faced by taxpayers
During the investigation stage, taxpayers often voluntarily deposit certain amounts through Form GST DRC-03. However, when they subsequently file an appeal against the demand order, the GST portal still requires them to pay the mandatory pre-deposit, even though they have already paid an amount exceeding the required limit. This happens due to the manner in which payments are recorded on the GST portal.
Creation of Demand ID
When a demand order in Form GST DRC-07 is issued a Demand ID is generated. The demand is recorded in Part II of the Electronic Liability Register on the GST portal. If the taxpayer makes payment using the “Payment towards Demand” functionality, the amount is automatically adjusted against the Demand ID.
However, payments made through Form GST DRC-03 are not automatically linked with the Demand ID and therefore do not appear as adjusted against the demand in the Electronic Liability Register.
System validation during appeal filing
While filing an appeal, the GST system automatically calculates Admitted amount, and Mandatory pre-deposit. The portal checks whether any amount has already been paid against the Demand ID.
Treatment of payment made through Form GST DRC-03
Payments made through Form GST DRC-03 are not automatically recognized against a specific Demand ID. Therefore, such payments are not considered by the system while calculating the pre-deposit requirement for filing an appeal. To resolve this issue:
- Taxpayers must link the DRC-03 payment with the relevant Demand ID.
- This can be done by filing Form GST DRC-03A on the GST portal.
Once this linkage is completed, the payment will appear in the Electronic Liability Register and the system will recognize it while calculating the mandatory pre-deposit for filing the appeal, thereby avoiding the requirement of making an additional payment.
To read the complete Advisory https://tutorial.gst.gov.in/downloads/news/final_advisory_for_payment_of_pre_deposit_through_drc_03.pdf
Source: GSTN
