DRC-07 is the Summary of the Order — the final demand order confirming the tax, interest, and penalty payable. It is issued after the officer considers your reply to DRC-01 (Show Cause Notice) and the hearing, or after the reply deadline expires without a response. Once DRC-07 is issued, the demand is a confirmed liability enforceable by the department. Recovery proceedings (bank account attachment, property seizure) can commence if not paid or appealed.
Common Triggers — Why You May Have Received This
DRC-01 reply was unsatisfactory or not filed
Personal hearing held and officer upheld the demand
Passed after settlement proceedings
Ex-parte order where taxpayer did not respond to DRC-01
How to Respond — Step by Step
Response form: APL-01 (Appeal) or DRC-03 (Payment) | Deadline: 90 days
1
Download and record DRC-07
The order has a DIN (Document Identification Number). Record it. Note the exact amounts of tax, interest, and penalty, and the deadline (3 months for appeal).
2
Option A — Pay the demand
If you accept the demand: pay via DRC-03 or PMT-06 challan. This closes the matter without further recovery proceedings.
3
Option B — File appeal (APL-01)
If you dispute the demand: file APL-01 before the Appellate Commissioner within 3 months of DRC-07. Pre-deposit 10% of disputed tax (mandatory). The balance demand is stayed during appeal.
4
Option C — Writ petition (High Court)
If the Appellate Authority is not yet constituted in your state (GSTAT), you can file a writ petition before the High Court challenging the DRC-07. This requires a lawyer.
5
Track appeal outcome (APL-04)
The Appellate Authority issues APL-04 — upholding, modifying, or quashing the demand. If adverse, appeal further to GSTAT (20% pre-deposit) or High Court.
Penalty Implications
⚠️ DRC-07 includes the final penalty. For Section 73: up to 100% of tax if not paid by DRC-07 stage. For Section 74 (fraud): minimum 100%, up to 100% of tax. After DRC-07, recovery proceedings include attachment of bank accounts, property, and receivables under Section 79 of the CGST Act.
Expert Tips
Never ignore DRC-07. Recovery action can begin immediately — account freezes happen without further notice.
If you cannot pay, file the appeal (APL-01) immediately with the 10% pre-deposit. This stays recovery proceedings.
Check whether the officer has correctly computed interest — interest should be from the due date to the date of payment, computed at 18% p.a.
If DRC-07 was passed ex-parte (you didn't respond to DRC-01), file an application for recall/review citing the reason for non-response — courts have granted relief in genuine cases.
Calculate your penalty or interest if you missed a deadline:
There is no standard instalment mechanism under GST. However, you can approach the Commissioner for a stay of recovery on humanitarian or financial hardship grounds. This is discretionary and not guaranteed.
The appeal before the Appellate Commissioner (APL-01) must be filed within 3 months of receiving DRC-07. The Appellate Commissioner has discretion to condone delay of up to 1 month beyond this.
Filing APL-01 and making the 10% pre-deposit stays the recovery proceedings for the remaining 90% during the appeal. Recovery action cannot proceed for the stayed portion while the appeal is pending.
