DRC-20 — Application for Payment of Dues in Instalments

DRC-20 is the application filed by a taxpayer requesting permission to pay outstanding GST dues in monthly instalments instead of paying the full amount at once. It is used when the taxpayer is unable to clear the liability immediately due to financial hardship but wants to remain compliant. This form begins the instalment approval process and is the taxpayer’s formal request for relief under Section 80.

When DRC-20 Is Filed

The form is used voluntarily by the taxpayer after a demand becomes payable and full payment is difficult.

• Filed after receiving a demand order in DRC-07 or revised order in DRC-08/08A.
• Used when recovery proceedings are initiated and taxpayer seeks payment relaxation.
• Applied when tax dues are large and immediate full payment will affect business operations.
• Suitable for genuine hardship cases where instalments allow smooth compliance.

Legal Framework

The ability to pay in instalments is a statutory relief provided under Section 80, subject to approval by the Commissioner.

• Governed by Rule 158(1) of the CGST Rules.
• The application must clearly explain reasons for seeking instalments.
• Commissioner may allow payment in up to 24 monthly instalments.
• Interest continues to apply on outstanding instalment amounts.

What DRC-20 Contains

The form captures financial difficulty and the request for staggered payment.

• Includes GSTIN, taxpayer name, and reference to outstanding dues.
• Specifies the total amount payable under tax, interest, penalty, or fees.
• Indicates the number of instalments requested by the taxpayer.
• Explains the reasons for financial hardship or inability to pay at once.
• Submitted with supporting documents such as financial statements or cash flow details.

Practical Importance

DRC-20 helps taxpayers avoid coercive recovery while giving them time to complete payment gradually.

• Protects business operations by avoiding sudden cash outflow.
• Temporarily suspends aggressive recovery actions while request is examined.
• Shows taxpayer intent to comply rather than evade dues.
• Useful in industries facing seasonal or temporary financial strain.

After Filing DRC-20

The Commissioner examines the request, and if satisfied, issues approval through FORM DRC-21. If the request is rejected, the taxpayer must pay dues immediately, or recovery actions will proceed without delay.