Summary of the notice and demands electronically, in FORM GST DRC-01 & FORM GST DRC-02, is mandatory
Introduction: In the realm of Goods and Services Tax (GST) compliance, Rule 142(1) of the Central Goods and Services Tax Rules, 2017 plays a pivotal role. This rule dictates the electronic issuance of notices and demands under specific sections of the Central Goods and Services Tax Act, 2017 (CGST Act). Particularly, it introduces the mandatory use of FORM GST DRC-01 and FORM GST DRC-02 for serving summaries of notices and statements.
The Rule 142(1) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) reads as under: –
“142. Notice and order for demand of amounts payable under the Act – (1) The proper officer shall serve, along with the
(a) notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01,
(b) statement under sub-section (3) of Section 73 or sub-section (3) of Section 74, a summary thereof electronically in FORM GST DRC-02, specifying therein the details of the amount payable.”
Any notice issued under the relevant sections including Section 73 and 74 of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’) is required to be accompanied by a summary thereof, electronically in FORM GST DRC-01 & FORM GST DRC-02. The summary in the electronic form is required to be furnished along with the show cause notice (u/s 52,73,74,76,122 and 123) in FORM GST DRC-01 and also along with statement (u/s 73(3) and 73(4) in GST DRC-02.
The Hon’ble Delhi High Court in the case of Sulender Shah v. Additional Commissioner/Joint Commissioner CGST [W.P.(C)NO. 15766 OF 2023 dated December 7, 2023] directed the Revenue Department to issue the summary of Show Cause Notice and Demand electronically in Form GST DRC-01 & Form GST DRC-02, thereby holding that, summary of Demand and Notice issued under Section 74 of the CGST Act is required to be issued electronically under Rule 142(1) of the CGST Rules.
The said issue is covered by the earlier decision of the Hon’ble Delhi High Court rendered in W.P.(C) No.12457/2023 captioned Shubham Gupta v. Additional Commissioner/Joint Commissioner CGST, and Anr., dated September, 21, 2023 wherein it was observed that, as per Rule 142(1) of the CGST Rules, any notice issued under Section 74 of the CGST Act, is to be accompanied by the summary, generated electronically in Form GST DRC-01 and Form GST DRC-02. It was further observed that, though the summary in the electronic form is required to be furnished along with the Show Cause Notice, the furnishing of the summary at the present stage during the pendency of adjudication proceedings would be of sufficient compliance.
Conclusion: In conclusion, the electronic issuance of summaries in FORM GST DRC-01 and FORM GST DRC-02 is a procedural requirement firmly anchored in Rule 142(1) of the CGST Rules. The recent judicial directives from the Hon’ble Delhi High Court underscore the legal obligation to serve these summaries electronically, emphasizing compliance with the rule even during ongoing adjudication. Stakeholders in the GST landscape must be cognizant of these electronic mandates, as non-compliance could have legal repercussions.
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