Direct and Indirect Taxation · Returns and Payment of Taxes

GST Payment in Instalments: Section 80 and Rule 158

Q: How many instalments can the Commissioner allow under section 80 of the CGST Act?

Up to twenty-four monthly instalments. The Commissioner decides the exact number in the order, within that limit. Interest under section 50 is payable.

Q: How do I apply for GST instalments using DRC-20?

You file an application electronically in FORM GST DRC-20 under Rule 158. The Commissioner then calls for a report from the jurisdictional officer about your financial ability to pay. If satisfied, the Commissioner issues an order in FORM GST DRC-21.

Q: What happens if I miss one GST instalment?

The whole outstanding balance payable on that date becomes due and payable forthwith. It is liable for recovery without any further notice being served on you.

Q: Can I get instalments for tax I declared in my return?

No. Section 80 excludes the amount due as per the liability self-assessed in any return. It applies to other amounts due under the Act.

Q: When is the instalment facility not allowed under Rule 158?

It is not allowed where you already have a default with recovery on, where instalments were not allowed to you in the preceding financial year, or where the amount sought is less than ₹25,000. The default can be under CGST, IGST, UTGST or any State GST Act.

Updated 10 October 2026 · Fact-checked

Under section 80 of the CGST Act, the Commissioner may, on application and for reasons recorded in writing, allow a taxable person to pay dues in up to 24 monthly instalments, with interest under section 50. Rule 158 sets the procedure: apply in FORM GST DRC-20, order comes in FORM GST DRC-21.

Understand Payment of Tax in Instalments and Recovery

Sometimes a taxpayer owes GST but cannot pay in one go. Section 80 gives a relief valve. The Commissioner can extend the time for payment, or allow the amount to be paid in monthly instalments, not more than twenty-four.

This is not a right. It is a discretion. The taxpayer must apply, and the Commissioner must record reasons in writing. Rule 158 adds a check: the Commissioner calls for a report from the jurisdictional officer on the financial ability of the taxable person to pay.

The relief covers any amount due under the Act, but not the amount due as per the liability self-assessed in any return. If you declared the tax in your own return, you cannot ask for instalments on it. This usually points to demands raised by the department, such as those arising from notices and orders.

The relief is not free. Interest under section 50 continues to be payable. And the facility is strict: if you miss any one instalment on its due date, the whole outstanding balance becomes due at once and can be recovered without any further notice.

Rule 158(3) also lists cases where the facility cannot be given. Learn these three conditions well, because they are the favourite exam point.

Key rules to remember

Maximum number of instalments (section 80): Instalments ≤ 24 monthly instalments; Instalments are monthly. The Commissioner decides the number, up to twenty-four, under Rule 158(2).
Amounts excluded from the facility (section 80): Liability self-assessed in any return → no instalments; The facility applies to other amounts due under the Act, not to tax you self-assessed in a return.
Application and order (Rule 158(1) and (2)): Application: FORM GST DRC-20 (electronic) → Order: FORM GST DRC-21; Before the order, the Commissioner calls for a report from the jurisdictional officer on financial ability to pay.
Facility not allowed (Rule 158(3)): (a) recovery process on for an existing default; (b) instalments not allowed in the preceding financial year; (c) amount sought < ₹25,000; Any one of the three is enough to refuse. The default in (a) can be under CGST, IGST, UTGST or any State GST Act. Condition (b) as worded in the Rules is 'has Not been allowed to make payment in instalments in the preceding financial year'; quote the Rule text in the exam.
Interest: Interest under section 50 is payable on the amount allowed in instalments; Instalment relief does not waive interest.
Default consequence (proviso to section 80): One instalment missed → whole outstanding balance due forthwith and recoverable without further notice; No notice is required before recovery starts.

How to solve Payment of Tax in Instalments and Recovery questions

Use this method for any question on GST instalments, whether it is theory, a case study or a short MCQ.

1Identify the nature of the amount. Is it self-assessed liability shown in a return? If yes, instalments are not available under section 80.
2Check the amount sought. If it is less than ₹25,000, Rule 158(3)(c) bars the facility.
3Check the taxpayer's history: any existing default with recovery on (under CGST, IGST, UTGST or State GST), and the position of instalments in the preceding financial year under Rule 158(3)(b).
4If no bar applies, state the procedure: electronic application in FORM GST DRC-20, report from the jurisdictional officer on financial ability, then the Commissioner's order in FORM GST DRC-21.
5State the limits of the order: monthly instalments, not exceeding twenty-four, with interest under section 50.
6State the default consequence: if any one instalment is missed on its due date, the full outstanding balance becomes payable at once and is recoverable without further notice.
7Conclude clearly: facility allowed or refused, with the specific clause as the reason.

Quickest way: Three-gate check

When to use it: For MCQs and short case-study questions where you must decide quickly whether instalments can be allowed.

Gate 1: Is the amount self-assessed in a return? If yes, stop. Not allowed.
Gate 2: Is the amount below ₹25,000, is recovery on for an earlier default, or is the preceding-year condition of Rule 158(3)(b) attracted? If any yes, stop. Not allowed.
Gate 3: Otherwise the Commissioner may allow up to 24 monthly instalments with interest. One missed instalment makes the whole balance due.

Common mistakes in Payment of Tax in Instalments and Recovery

Saying instalments are available on tax self-assessed in the return.
Students remember 'any amount due' and miss the exclusion.
Fix: Remember section 80 excludes the amount due as per the liability self-assessed in any return.
Writing that interest is waived during the instalment period.
Students think relief means a concession on interest.
Fix: Write that payment is subject to interest under section 50.
Saying the taxpayer can pay the balance later if one instalment is missed.
Confusion with ordinary grace practice.
Fix: Under the proviso, default in any one instalment makes the entire outstanding balance due forthwith, recoverable without further notice.
Mixing up the forms: DRC-20 and DRC-21.
Both are DRC forms with close numbers.
Fix: DRC-20 is the taxpayer's application. DRC-21 is the Commissioner's order.
Treating the facility as a right and ignoring the financial-ability report.
Students focus on the 24-month limit only.
Fix: State that the Commissioner acts on the application and the jurisdictional officer's report, and records reasons in writing.
Applying the ₹25,000 limit as 'up to ₹25,000'.
Careless reading of the threshold.
Fix: The facility is barred where the amount is less than ₹25,000. An amount of exactly ₹25,000 is not barred by this clause.

Worked examples

Example 1

Sharma Traders, Jaipur, received an order demanding ₹4,80,000 of tax from the department. It applies electronically for payment in instalments. It has no earlier default and has not been refused instalments before. Explain whether and how the facility can be granted, and what happens if it misses an instalment.

Show the solution

The amount is demanded by the department, not self-assessed in a return, so section 80 is not excluded.
The amount is ₹4,80,000, which is not less than ₹25,000, so Rule 158(3)(c) does not bar it.
No default with recovery on, and no refusal of instalments is stated, so clauses (a) and (b) do not bar it as given.
Procedure: Sharma Traders files FORM GST DRC-20 electronically. The Commissioner calls for a report from the jurisdictional officer on its financial ability to pay.
On considering the request and the report, the Commissioner may issue an order in FORM GST DRC-21 allowing monthly instalments, not exceeding twenty-four. Reasons are recorded in writing.
Interest under section 50 is payable.
If any one instalment is missed on its due date, the whole outstanding balance becomes due forthwith and is liable for recovery without further notice.

Answer: The Commissioner may allow up to 24 monthly instalments on the ₹4,80,000 through a DRC-21 order, with interest under section 50. Default in any one instalment makes the entire balance immediately due and recoverable.

Example 2

Mehta Enterprises wants instalments for (i) ₹18,000 demanded in an order and (ii) ₹3,00,000 of tax it had self-assessed in its GSTR-3B return. Can the Commissioner allow instalments in each case?

Show the solution

Case (i): the amount is ₹18,000, which is less than ₹25,000. Rule 158(3)(c) bars the facility.
Case (ii): the amount of ₹3,00,000 is above ₹25,000, but it is the liability self-assessed in a return.
Section 80 allows instalments for amounts due other than the liability self-assessed in any return. So case (ii) is excluded.
Neither amount qualifies.

Answer: No in both cases: (i) the amount is below ₹25,000 (Rule 158(3)(c)); (ii) it is a self-assessed return liability, which section 80 excludes.

Exam tips

Memorise the three bars of Rule 158(3) as a short list: existing default with recovery on, instalments not allowed in preceding financial year, amount below ₹25,000.
Always mention both the section 80 exclusion for self-assessed liability and the 24-month cap.
Write the forms correctly: DRC-20 for application, DRC-21 for order. A written answer earns marks for correct form names.
For default, use the words 'whole outstanding balance', 'forthwith' and 'without any further notice'.
In MCQs, watch the numbers: 24 instalments, ₹25,000 threshold, and the word 'less than'.

Practice questions from Returns and Payment of Taxes

Payment of Tax in Instalments and Recovery in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Payment of Tax in Instalments and Recovery: frequently asked questions

How many instalments can the Commissioner allow under section 80 of the CGST Act?

Up to twenty-four monthly instalments. The Commissioner decides the exact number in the order, within that limit. Interest under section 50 is payable.

How do I apply for GST instalments using DRC-20?

You file an application electronically in FORM GST DRC-20 under Rule 158. The Commissioner then calls for a report from the jurisdictional officer about your financial ability to pay. If satisfied, the Commissioner issues an order in FORM GST DRC-21.

What happens if I miss one GST instalment?

The whole outstanding balance payable on that date becomes due and payable forthwith. It is liable for recovery without any further notice being served on you.

Can I get instalments for tax I declared in my return?

No. Section 80 excludes the amount due as per the liability self-assessed in any return. It applies to other amounts due under the Act.

When is the instalment facility not allowed under Rule 158?

It is not allowed where you already have a default with recovery on, where instalments were not allowed to you in the preceding financial year, or where the amount sought is less than ₹25,000. The default can be under CGST, IGST, UTGST or any State GST Act.