How to Correct Mistakes in GST by DRC-03? Its Impact on GST Audit

If you are a business owner registered under the Goods and Services Tax (GST) regime, you are required to file GST returns on a regular basis. However, there may be times when you make errors while filing your GST returns. In such cases, you can correct the mistakes by filing a form called DRC-03. In this article, we will discuss how to correct mistakes in GST by DRC-03 and its impact on GST audit.

What is DRC-03?

DRC-03 is a form that is used to correct the errors made in GST returns. It is a voluntary disclosure of the error and is also known as a self-assessment of the tax liability. The form should be filed within a period of 30 days from the date of discovery of the error.

How to file DRC-03?

Here is a step-by-step guide on how to file DRC-03:

Visit the GST portal and log in with your credentials.
Select the ‘returns’ tab and click on ‘File Returns’.
Select the financial year and the tax period for which you want to file DRC-03.
Select ‘DRC-03’ from the drop-down menu and click on ‘prepare online’.
Fill in the details of the error made in the GST returns.
Calculate the amount of tax and interest payable on the error.
Upload the supporting documents, if any.
Submit the form and take a printout of the acknowledgement receipt.

Impact of DRC-03 on GST audit

When you file DRC-03, you are voluntarily disclosing the error and paying the tax and interest on the error. This can have an impact on the GST audit, as the auditor will take into account the voluntary disclosure while conducting the audit. If the auditor finds that there are more errors than what has been disclosed in DRC-03, he may impose penalties and interest on the additional errors.

However, if the auditor finds that there are no further errors, he may waive the penalty and interest on the errors disclosed in DRC-03. This can save you a lot of money in penalties and interest.

Conclusion

Filing DRC-03 is a simple and straightforward process. It is always better to voluntarily disclose the errors and pay the tax and interest on the errors, rather than waiting for the auditor to find them and impose penalties and interest. This can save you a lot of money in the long run. However, it is important to note that you should file DRC-03 within 30 days of the discovery of the error, or else you may have to face penalties and interest.