DRC-21 – Order for Allowing Payment of Dues in Instalments

DRC-21 is the formal order issued by the Commissioner approving the taxpayer’s request to pay outstanding GST dues in instalments. It is issued only after examining the application submitted through DRC-20. Once granted, this order specifies the number of instalments, payment schedule, and conditions that the taxpayer must follow. It legally authorises deferred payment and temporarily protects the taxpayer from immediate recovery action.

When DRC-21 Is Issued

DRC-21 is generated only after careful assessment of the taxpayer’s financial condition and the justification provided in DRC-20.

• Issued when the Commissioner accepts the request made in DRC-20.
• Used when the taxpayer proves financial difficulty or cash flow constraints.
• Applied when outstanding dues are large and instalment payment is practical.
• Triggered to prevent coercive recovery during the instalment period.

Legal Framework

The instalment facility is granted strictly in accordance with statutory limits and conditions set under GST law.

• Based on Section 80 of the CGST Act.
• Procedurally governed by Rule 158(2) of the CGST Rules.
• Allows payment in up to 24 monthly instalments, subject to approval.
• Interest continues to apply on unpaid instalment balances.

Contents of DRC-21

The form sets out the complete terms of instalment approval and the taxpayer’s obligations.

• Specifies GSTIN, name of taxpayer, and reference to DRC-20 application.
• States the total amount payable and the number of instalments approved.
• Provides the due date and breakdown for each monthly instalment.
• Lists conditions to be followed, including timely payment of all instalments.
• Includes Commissioner’s approval and instructions to recovery officers.

Practical Importance

DRC-21 is valuable for businesses that need financial breathing space to clear dues in phases while avoiding harsh recovery actions.

• Temporarily halts recovery proceedings for dues covered under instalments.
• Helps maintain cash flow and operational stability during difficult periods.
• Protects taxpayer from asset attachment or bank garnishing for approved dues.
• Enables transparent and predictable repayment planning.

Action Required After Receiving DRC-21

The taxpayer must strictly follow the instalment schedule and make each payment on time. Defaulting any instalment results in automatic cancellation of the approval, and full recovery proceedings may restart immediately.