DRC-07 – Summary of the Adjudication Order

DRC-07 is issued after adjudication of a Show Cause Notice to summarise the final order passed under Section 73 or 74. It records the confirmed demand of tax, interest, penalty, and any other dues after considering the taxpayer’s reply in DRC-06 and the officer’s findings. This form updates the Electronic Liability Register and becomes the official basis for recovery if payment is not made.

When DRC-07 Is Issued

DRC-07 is issued only after the adjudicating officer completes the entire SCN process, reviews all submissions, and passes the final order.

• Issued when the officer confirms full demand proposed in the SCN.
• Issued when the demand is reduced based on the taxpayer’s reply or hearing.
• Issued even when the SCN is dropped entirely for certain tax periods or issues.
• Used in proceedings originating from DRC-01 and expanded by DRC-02.

Legal Background

The adjudication order in DRC-07 is passed under Sections 73 or 74 and must follow the principles of natural justice, including reply consideration and hearing.

• Governed by Rule 142(5) of the CGST Rules.
• Reflects the final order issued under the applicable section (73/74/122/125/127/129/130 etc.).
• Must be uploaded by the adjudicating authority for legal validity.
• Creates an enforceable demand, enabling recovery actions if unpaid.

Information Captured in DRC-07

DRC-07 contains the digitally recorded summary of the final order, ensuring accurate reflection of the outcome.

• Shows GSTIN, order number, date, and relevant tax period.
• Displays the confirmed tax, interest, penalty, fee, or other amounts payable.
• Indicates any dropped demands or reductions made during adjudication.
• Reflects section-wise allocation of the final confirmed amounts.
• Automatically updates the Electronic Liability Register for recovery purposes.

Practical Significance

DRC-07 is a crucial document because it finalises the department’s position, determines the exact amount payable, and guides the taxpayer’s next compliance steps.

• Becomes the official demand that the taxpayer must pay within the permitted time.
• Can be challenged in appeal under Section 107 using FORM GST APL-01.
• Helps identify computational errors or omissions that may be corrected later through DRC-08A.
• Forms the basis for issuing recovery notices such as DRC-09 if unpaid.

Action After Receiving DRC-07

The taxpayer must review the order carefully, verify computation accuracy, and decide whether to pay, partially dispute, or file an appeal. If the taxpayer accepts the order, payment should be made immediately to avoid recovery proceedings; if not, the appeal filing time (three months) begins from the date of communication of the order.