In an important directive outlined by the Central Board of Indirect Taxes and Customs (CBIC) through Instruction No. 04/2023, dated November 23, 2023, an emphasis has been placed on the electronic uploading of summaries of Show Cause Notices (SCNs) in Form GST DRC-01 and Orders in Form GST DRC-07. This directive is in alignment with the mandatory requirements stipulated under Rule 142 of the Central Goods and Services Tax (CGST) Rules.
Acknowledging the significance of compliance, the Board has unequivocally instructed Proper Officers to execute the electronic uploading of Form GST DRC-01 and DRC-07 on the GST portal. Non-compliance with this directive is to be avoided at all costs. This article serves as an invaluable resource, providing insights into the tax order summary upload process and ensuring that Proper Officers understand the mandated procedure comprehensively.
Understanding Tax Orders
A tax order is a formal written document issued by tax authorities to taxpayers that outlines specific details related to their tax liability. These orders are significant in assessing and regulating a taxpayer’s financial responsibilities.
Tax orders are issued electronically through the GST portal, providing efficient communication between tax authorities and taxpayers. Taxpayers can conveniently access all their tax orders on the GST portal by logging in using their GSTIN, allowing for transparency and easy reference.
Furthermore, taxpayers possess the right to appeal against any issued tax order within a stipulated timeframe, enabling them to contest or seek clarification on the content and implications of the order.
Functions of Tax Orders
Now that you know what tax orders are, you must be wondering what’s the need of them. So, read on their functions:
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Assessment of tax liability
This order determines the amount of tax a taxpayer owes for a specific period.
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Levy of penalty or interest
When a taxpayer fails to comply with certain provisions of the GST Act, the authorities may issue an order levying a penalty or interest on the outstanding tax liability.
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Refund of tax
In case taxpayers have paid excess tax, they can file a claim for a refund. The authorities will issue an order granting or rejecting the refund claim.
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Decision on an appeal
If a taxpayer disagrees with an assessment order or any other order issued by the authorities, they can file an appeal. The appellate authority will issue an order upholding or modifying the original order.
Common Types of Tax Orders
The following are some common orders of taxes:
| Type | Meaning |
| Show Cause Notice (SCN) | A notice asking the taxpayer to explain potential penalization. |
| Demand Order | Directs taxpayers to pay outstanding tax liability within a specified timeframe. |
| Assessment Order | Determines the final tax liability for a specific period. |
| Refund Order | Authorizes the refund of excess tax paid. |
| Order-in-Original (OIO) | Initial order was passed by tax authorities. |
| Order-in-Appeal (OIA) | order passed by the appellate authority after considering the taxpayer’s appeal. |
Significance of Summarizing Tax Orders
Here are five key points explaining the significance of summarizing tax orders:
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Mandatory Compliance and Record-Keeping
Summarizing tax orders in prescribed forms (DRC-01 and DRC-07) and uploading them on the GST portal is a mandatory compliance requirement under CBIC guidelines. This practice ensures organized and easily accessible records of all tax-related proceedings, simplifying future references.
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Financial Clarity and Decision-Making
Providing a consolidated view of tax liabilities, penalties, interest, and refunds, summarized tax orders enable better financial planning and decision-making.
Identifying patterns or trends in tax orders allows for a proactive approach to potential areas of risk or dispute, supporting informed decision-making.
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Internal Communication and Knowledge Management
Summarized tax orders enhance communication and coordination among various departments, promoting alignment on tax matters. Moreover, preserving institutional knowledge of tax history aids decision-making, preventing recurring issues and promoting a cohesive organizational approach.
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Additional Advantages for Reputation and Risk Mitigation
Demonstrating a taxpayer’s track record of compliance and transparency, summarized tax orders contribute to building a positive reputation with tax authorities. Furthermore, early identification of potential tax-related issues through summaries allows for timely corrective actions, mitigating risks easily.
Preparing for Summary Upload
Preparation helps avoid mistakes. Thus, you must follow these steps involved in preparing before uploading tax order details:
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Identify the Relevant Tax Orders
- Review your records to locate the tax orders that require summarization and upload.
- Specifically, focus on Show Cause Notices (SCNs) and demand orders, which typically mandate summary uploads.
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Download and Complete the Prescribed Forms
- Download the applicable forms from the GST portal: Form GST DRC-01 for summarizing SCNs
- Form GST DRC-07 for summarizing demand orders
- Fill in all required details accurately, including GSTIN
- Financial year
- Order details (type, date, amount, etc.)
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Gather Supporting Documents
- Collect any relevant documents to support the information in the summaries, such as Copies of the original tax orders
- Payment receipts
- Correspondence with tax authorities
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Verify Accuracy and Completeness
- Review the completed forms and supporting documents to ensure they are accurate, complete, and consistent with the original tax orders.
- Pay close attention to dates, amounts, tax periods, and other crucial details.
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Prepare for Digital Upload
- Save the completed forms and any supporting documents in a digital format suitable for upload, typically PDF.
- Ensure the file sizes comply with the portal’s guidelines.
- Digitally signing the forms is not a strict prerequisite for summary upload. However, it’s recommended for enhanced security and authentication.
Choosing the Right Platform for Upload
The right platform can make the process very easy for you. Use the following tips to choose a suitable platform for you:
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Check CBIC Approval
Verify that the platform is approved or authorized by the CBIC for summary uploads. This information is usually available on the CBIC website or GST portal.
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Assess Security Features
Review the platform’s privacy policy to understand how it handles and protects sensitive tax information. You must also evaluate the platform’s security measures, such as:
- Data encryption
- Access controls
- User authentication
- Regular security audits
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Evaluate User Experience
Check the following aspects to see how user-centric the platform is:
- Explore the platform’s interface to assess its ease of use, clarity of instructions, and overall user-friendliness.
- Ensure it’s compatible with your devices, browsers, and operating systems.
- If available, try a demo or trial version to test its functionality and suitability for your needs.
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Explore Support and Documentation
Check the availability and responsiveness of their helpdesk or support services for troubleshooting assistance. You can also review their user guides and tutorials to gauge the quality of their documentation.
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Read Reviews and Testimonials
Gather insights from reviews and testimonials from other users to understand their experiences with the platform’s performance, reliability, and overall satisfaction.
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Consider Costs and Pricing
If the platform charges fees, evaluate the pricing structure and compare it to other options to ensure it aligns with your budget.
Step-by-Step Guide to Uploading a Summary of Tax Orders
Once preparations are done, it’s time to finally upload the document. Here is how to upload tax order summaries:
Step 1: Go to the GST Home page.
Step 2: Log in to the GST Portal using your valid credentials.
Step 3: Go to Statutory Functions > Assessment/Adjudication > Determination of tax (Fraud/other).
Step 4: Under Quick Links, click the Issue Order link.
Step 5: In the GSTIN field, enter the GSTIN of the taxpayer for whom the order summary is to be uploaded.
Step 6: Fill Order Details
In the Order Details tab:
- Enter the order number.
- Select the Order Type.
- Choose the Order Date and Demand to be paid by Date.
- Select the tax period and the Issue Involved.
- Click “Save & Continue.”
Step 7: Goods and Services Details
In the Description Goods and Services tab:
- Add HSN Code for goods.
- Add SAC Code for services.
- Click “Save & Continue.”
Step 8: Details of Demand
In the Details of Demand tab:
- Enter details like tax rate, turnover, Place of Supply, relevant Act, tax interest, etc.
- Click ADD for additional information if needed.
- Click “Save & Continue.”
Step 9: Select the Choose File button and attach relevant documents.
Step 10: Save Draft or Issue
Step 11: Affix your Digital Signature (DSC) and click the Sign button.
Step 12: Success Confirmation
A success message will be displayed, indicating the generation of the order reference number. Click OK to complete the process.
Common Mistakes to Avoid During Upload
The uploading process can seem a bit tricky. However, if you keep the following things in mind, the process can be as smooth as butter:
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Using Incorrect Forms
One critical mistake to avoid during the upload process is incorrect forms. It is essential to ensure that the selected forms align precisely with the types of orders being summarized. Using the wrong forms can lead to complications in compliance and may result in errors or discrepancies.
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Providing Inaccurate Information
Inaccuracies in details entered in the forms pose a significant risk. Double-check all information, including GSTIN, financial year, order numbers, dates, and amounts. Verifying that the summarized information aligns accurately with the original tax orders is crucial, preventing potential discrepancies that could lead to misunderstandings or disputes.
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Incomplete Documentation
Another common pitfall is uploading summaries with incomplete documentation. Ensure all necessary supporting documents, such as copies of original orders, payment receipts, or correspondence with tax authorities, are attached. Inadequate proof can undermine the credibility of the submitted information.
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File Format Issues
File format errors can create hurdles in the upload process. Avoid using unsupported formats; instead, save forms and documents in the correct digital format, typically PDF, as specified by the GST portal. Additionally, be mindful of file size restrictions to prevent any upload errors.
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Technical Errors and Connectivity Issues
Technical glitches and connectivity issues can disrupt the upload process. Maintain a stable internet connection to ensure a seamless submission. Additionally, use a compatible and updated browser to prevent any unforeseen technical errors that may impede the successful upload of tax order summaries.
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Missing Deadlines
Non-compliance with specified deadlines for summary uploads is a significant mistake to avoid. Timely submission is crucial to prevent penalties or interest charges. Being mindful of deadlines ensures a smooth and penalty-free compliance process.
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Lack of Verification Before Submission
Failing to review all uploaded documents before the final submission is a common oversight. It is imperative to carefully review each document to catch any errors or omissions. This step is crucial in ensuring the accuracy and completeness of the uploaded tax order summaries.
Conclusion
Now that you’re familiar with the tax order summary upload process remember that CBIC guidelines constantly evolve, so stay informed. If you’re uncertain or dealing with complicated tax matters, seek guidance from a qualified GST practitioner.
Moreover, it is suggested to always maintain copies of uploaded summaries and supporting documents for future reference and audits. Also, try to adhere strictly to specified deadlines during summary uploads to avoid potential penalties or interest charges.
Also Read: GST Calculator Online – Simplify Your Daily Finances And Taxes
Frequently Asked Questions
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Who is a “Proper Officer” Under GST?
The Central Goods & Services Tax Act 2017 defines the term ‘Proper Officer’ in Section 2(91) as the Commissioner or any other Central Tax officer entrusted with the function of the Commissioner in the Board.
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What is the DRC-07 Form in GST?
The DRC-07 form within the GST framework functions as a consolidated summary sheet for all orders.
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How do you Download DRC 07?
To download Form DRC-07, navigate to the statutory function module. Click on “Determination of tax/Fraud,” then proceed to “Issue Orders.” You will find Form DRC-07 visibly accessible within this section.
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What is Form DRC-01?
Form GST DRC-01 is a document used to electronically summarize and upload details of Show Cause Notices (SCNs) issued to a taxpayer.
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What are HSN codes?
The Harmonized System of Nomenclature (HSN) is a globally recognized approach for naming, classifying, and identifying products.
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What are SAC codes?
The Services Accounting Code (SAC) is utilized to identify, classify, measure, and ascertain the applicability of GST on services in the country.
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What is the Difference Between the SAC and HSN codes?
The primary distinction between HSN and SAC codes lies in their scope. HSN codes are exclusively designed for goods and services, whereas SAC codes specifically pertain to services alone.
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What is the Time Limit for DRC-01?
For a bonafide defaulter, the applicable duration is 2 years and 9 months from the due date of filing the Annual Return for the relevant Financial Year.
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Along with SCN, What Details are Issued by the Proper Officer?
When issuing a Show Cause Notice, the Proper Officer includes crucial details such as the recipient’s GSTIN and address, SCN reference number, and a brief summary of the case.
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When Does the Proper Officer Under GST Serve SCN to a Person?
The Proper Officer serves SCN when there are issues such as non-payment or short payment of tax, erroneous tax refund, or incorrect use of input tax credit.
