DRC 13 Notice & Reply

Reply to the recovery Notice to a third person under section 79(1)(c)

What is DRC-13 notice under GST ?

DRC 13 is Another way of recovery of amount is by realising it from the debtors or any other person from whom money is due or may become due or who holds or may subsequently hold money for or on account of the defaulter. Recently Maharashtra State GST department has started issuing notices to the Debtors of the defaulters asking them not to pay to their supplier (GST defaulter) rather to deposit the amount due to the defaulter assessee in GST account through DRC-14 which will be considered as good and sufficient discharge of the liability to such person to the extent amount is paid.

The proper officer may serve notice under section 79 upon a person referred in FORM DRC 13 directing him to deposit the amount specified in the notice. Where a third person makes the payment of the amount specified in the notice issued . After making payment a proper officer shall issue a certificate in the FORM GST DRC 14 to a third person clearly indicating the details of the liability discharged.

Please note that any payment made by you in compliance of this notice will be deemed under section 79 to have been made under the authority of the said taxable person and the certificate from the government in GST-14 will constitute a good and sufficient discharge of your liability to such person to the extent of the amount specified in the certificate.

The reply of DRC-13 has to be furnished through the FORM GST DRC-14. The defaulter has to deposit the amount specified in the notice DRC-13.

Please note that, in case you fail to make payment in pursuance of this notice, you shall be deemed to be defaulter in respect of the amount specified in the notice and consequences of the Act of the rules made thereunder shall follow.

The issues which emerge out of such notices may be like this

• What if the defaulter has shown the noticee third party person as debtor for X amount but the debtor has some disputes with regard to the payments and claims that nothing is payable. Does it mean that he should simply file a reply that nothing is payable?

• where a person on whom a notice is served proves that money demanded or any part thereof was not due to the person in default or that he did not hold any money for or on account of the person in default.

• Whether noticee should contact the defaulter and seek his concurrence before making payment to the department

In all the above cases every person to whom the notice is issued under sub-clause (i) shall be bound to comply with such notice or, if he fails to make the payment in pursuance thereof to the Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Act or the rules made thereunder shall follow.

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