Last Updated on February 26, 2026
Struggling to pay your GST dues due to payment issues and approaching deadlines? Don’t worry—this article guides you through effective solutions. Read on to learn how to manage this situation.
Sometimes, taxpayers can’t pay taxes due to financial difficulties, such as cash flow issues or demand recovery issued under Sections 73 or 74 of the CGST Act. In such cases, the law provides flexibility by allowing payment in instalments or at a later date, rather than a lump sum, offering relief to taxpayers.
What is Deferred Payment?
Under Section 80 of the CGST Act, 2017, the GST law allows taxpayers facing financial difficulties to pay confirmed tax dues in instalments or at a later date. When the taxpayers are unable to pay the taxes in one go, they can file an appropriate application under Form GST DRC-20. The officer may allow payment in instalments for a maximum period of 24 months.
Who Can File an Application Under Form GST DRC-20?
A registered taxpayer who has a confirmed demand under the GST Act. A confirmed demand basically occurs when, following an audit, investigation, or scrutiny, tax authorities issue an order (e.g., FORM GST DRC-07) finalized under Section 73 or 74, declaring an outstanding liability for unpaid tax, interest, or penalties. Taxpayers must pay this confirmed amount within 3 months to avoid recovery proceedings.
When Can You File an Application Under Form GST DRC-20?
A taxpayer can file this application under one of the following two reasons:
- When the payment due is deferred to a later stage.
- When the due is paid in instalments.
Timeline for Filling the Application Under Form GST DRC-20
The application must be filed after a demand order (DRC-07) is issued and before recovery proceedings are initiated. All you need are valid login credentials to file this application.
Step-By-Step Procedure to Apply for Deferred Payment
An Application for Deferred payment or payment in instalments can be made by filing an appropriate application under Form GST DRC-20 before the Officer.
Before filling out the Application, the applicant has to keep the following documents handy:
- Details of the Applicant- if an individual- Aadhaar card, PAN card, and any other relevant document. If a company, then provide company details, authorised person details, and verification correspondence details.
- Demand ID
- Details of payment
- Financial records, statements, reconciliation statement, profit and loss statement, balance sheet, proof of future profitability of business and any other relevant records.
Step 1: Visit the GST Portal
Log in to the GST Portal using your existing credentials.
Step-2: Fill Application Form GST DRC-20 for Deferred Payment of GST
Registered taxpayers can now fill out Form GST DRC-20 on the GST Portal itself.
To fill out the application, the applicant must click the “services tab,” then the “user services” tab. The drop-down will have the option “My Application.” The Applicant is to click on the “New Application” option.
Select ‘Application for Deferred Payment/Payment in Instalment’ as the application type.
The Applicant must enter the Demand ID. Keep the Demand ID handy. Once the Demand ID is entered and the search button is clicked, the outstanding demand gets displayed.
Note: To check the Demand Id, go to Dashboard > Services > user services > View Notices and Orders. In the list of notices and orders, the applicant can easily see the Demand Order Id.
- Enter the Taxation Period details and the Type of Payment. The taxation period is auto-calculated. In the type field, choose Monthly Instalments or the Deferred Payment option. If Deferred Payment is selected, select the appropriate “Due Date of Payment” from the calendar.
- Supporting Documents: The Applicant/taxpayer has to upload supporting documents. The Applicant can upload up to 4 documents at a time. The Applicant has to enter a brief description of the document.
- Reasons: Enter the reason for filing the application. Though not mandatory, it is advisable to include reasons to improve the chances of application acceptance.
- Verification: The applicant must check the box to confirm that all information in the application is accurate and complete.
- Signature: The last step is to enter the name and details of the authorised person of the applicant, as well as the place where the applicant is filing the application.
Step-3 Preview and Submit
Upon successful completion of all the above-mentioned steps, the Applicant must click the Preview tab at the bottom-right corner of the page. Once clicked, the applicant can review the application and make any required changes.
Upon final review of the application, the applicant has to click the submit button.
Step-4: Verification and Authentication
After the applicant submits the Application, the applicant must either digitally sign it or verify it with a verification code. Once the application is submitted, the applicant/taxpayer is given two options to sign the application:
- Sign with DSC
- Sign with EVC
Note: DSC and EVC are both used for authentication, but they differ slightly in security and usage. If you are an individual taxpayer/proprietor or an MSME business holder, it is advisable to use EVC, but if you are a company, LLP or someone who files frequent tax refunds, it is better to use DSC. If you are confused about which method is beneficial, feel free to call our Kanakkupillai experts for better assistance.
Step-5: Acknowledgement
Upon successful application authentication, the page will display a Provisional Acknowledgement slip. The Applicant will also receive an SMS and an email regarding the generation of the ARN.
Step 6: Download the Application
The final step is to download the application, then save it for future reference.
How to view the submitted application and orders passed in the application?
- Log in to the portal.
- In the dashboard, click on services.
- Then click on user services.
- Select the My application tab and
- Click on case details: Once the applicant clicks on my cases,
- To view the filed application, click the application tab on the left side of the display. All filed applications will be displayed, along with all supporting documents filed at the time of filing.
- To view orders, click on the orders tab on the left side of the display screen.
How Can Kanakkupillai Help?
Facing difficulty in paying GST dues? Our experts can assist you. At Kanakkupillai, we aim to simplify legal compliance and help you prevent late payments and scrutiny by offering end-to-end, customised, and customer-centric support so you can relax and focus on expanding your business and achieving greater profits.
To understand how deferred tax payments can benefit your business and how to improve the chances of your application being accepted without any modifications or issues, reach out to us today for a better tomorrow.
Wrap Up
The deferred tax payment scheme allows taxpayers to defer tax payments to a future period. The concept of deferred payment has helped many taxpayers to financially plan their business by enhancing liquidity and supporting capital investments. This strategic financial planning helps businesses retain cash for immediate use, which is a boon for start-ups and small business owners. The procedure for filing an application for deferred payments is simple, easy, and straightforward. However, it is also advisable to adhere to the government guidelines and pay taxes on time.
Related Services
Frequently Asked Questions
1. Which form to file for applying for Deferred Payments
FORM GST DRC-20
2. Should I register to apply for Deferred tax benefits?
Yes, only registered taxpayers are allowed to claim the benefit of Deferred tax payments.
3. What documents are required to file the Application?
Valid login credentials, demand Id details, audited financial statements, reconciliation statement, tax computation statement and sufficient proof to show the future profitability of the business.
4. What are the chances of my application for deferred tax payment being accepted?
A: It is solely the discretion of the officer in charge to accept the application based on the documents and reasoning submitted by the applicant. Ensure that all your documents and financial records are accurate and up to date to avoid further queries and rejection by the officer. We at Kanakkupillai strive to ensure that your application has minimal scrutiny issues.
5. Can I file more than one application for Deferred tax payment?
No, only one application can be maintained against one Demand Id.
6. How do I know if my application is processed/accepted/rejected?
You will receive an SMS or an email with the status, and the order passed in your application. The order passed in the application can also be viewed on the portal.
7. What will happen if my application is accepted, but I’m unable to make a payment in the future?
In such cases, the entire outstanding payment will become due and payable, and the taxpayer will be liable for recovery without any further notice.
