Answer

1. F

   Facts

   Paying the full tax, interest and applicable penalty within the allowed time can conclude proceedings. But payment does not cure a defective notice, and paying without advice gives up your defence.

2. P

   Provisions and law

   • Rule 142(2), CGST Rules 2017A person paying tax, interest and penalty voluntarily or after an intimation informs the officer in DRC-03, and an acknowledgement issues in DRC-04.
   • Rule 142(3), CGST Rules 2017Where the full amount in the notice is paid within the time allowed, the proceedings are concluded and an order issues in DRC-05.
   • Sec 74A(8), CGST Act 2017Under Sec 74A, paying tax and interest before the notice means no penalty in non-fraud cases; in fraud cases a 15 percent penalty is also paid.
3. A

   Analysis

   If you have weak evidence, early payment reduces cost. If you have a genuine defence, paying may not be needed. Where a payment is made against an existing demand, link it using DRC-03A so the liability register shows it. Ask for a DRC-05 order confirming closure after paying the full amount.

4. C

   Conclusion

   1. 1Assess the strength of your evidence first.
   2. 2If paying, use DRC-03 and select the right cause.
   3. 3Link the payment to the demand through DRC-03A.
   4. 4Ask for closure in DRC-05.

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