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CMA Final · Indirect Tax Laws and Practice · Walkthrough of GSTN Portal

Patel Engineering has Rs 5,00,000 in its electronic cash ledger and, on the portal, notices that a demand order has been raised against it. It wishes to pay a part of the disputed demand while contesting it in appeal. Which portal facility should it use to make the payment against the demand?

The taxpayer should make the payment from the electronic cash ledger through Form GST DRC-03, selecting the relevant demand order as the cause. This links the payment to the demand in the liability register. Credit ledger cannot pay interest or penalty, and email requests are not the prescribed method.

  1. APayment through Form GST DRC-03 only for voluntary payments, not demands
  2. BPayment using electronic credit ledger for interest and penalty
  3. CUtilise the cash ledger through Form GST DRC-03 by selecting the cause as the relevant demand orderCorrect
  4. DRequest the proper officer to adjust the cash ledger by email

Explanation

Payment towards a demand is made by debiting the electronic cash ledger through Form GST DRC-03, quoting the demand order reference as the cause of payment. The payment is then linked to the demand in the liability register. Credit ledger cannot be used for interest or penalty, and officers do not adjust by email, so the other options are wrong.

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