QRMP SCHEME (Quarterly Return Filing and Monthly Payment Scheme)

JAN 08, 2021
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The government has launched the Quarterly Return filing & Monthly Payment of Taxes (QRMP) scheme for small taxpayers under the GST system.

CBIC rolled out Circular No. 20/01/08/2020- GST on November 10th, 2020, introducing the QRPM Scheme that is effective from January 1st, 2021.

Under the said scheme, eligible taxpayers have the option to file their GST returns on quarterly basis, while payment of tax will be on monthly basis through a Challan. In this case payment of Challan in cash is mandatory.

This is an OPTIONAL scheme. Moreover, this option can be availed GSTIN wise. Therefore, few GSTINs for one PAN can opt for the Scheme and the remaining GSTINs can remain out of the Scheme.

Eligibility for the Scheme

  • In terms of Notification No. 84/2020-Central Tax, dated 10-11-2020, a registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate annual turnover (PAN wise) of up to Rs 5 crore in the preceding financial year is eligible for this scheme.
  • Aggregate annual turnover for the preceding financial year shall be calculated in the common portal taking into account the details furnished in the returns by the taxpayer for the tax periods in the preceding financial year.

  • Any person obtaining a new registration or opting out of the Composition Scheme can also opt for this Scheme.

Time limit to opt for QRMP Scheme

  • The facility is available online and can be availed throughout the year, in any quarter
  • Taxpayer can opt in for any quarter from first day of second month of preceding quarter to the last day of the first month of the quarter
  • Timeline for exercising option under QRMP Scheme during FY 2020-21

    SI. No. Period – Quarter Timeline
    1 April – June 1st Feb 2021 to 30th April 2021
    2 July – Sept 1st May 2021 to 31st July 2021
    3 Oct – Dec 1st August 2021 to 31st Oct 2021
    4 Jan – March 1st Nov 2021 to 31st Jan 2022
  • In order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such option.
    If taxpayer wants to opt this scheme and he is exercising his option on 28th November for the quarter Jan to March, he must have furnished the return for the month of October before such date.
  • Option for QRMP, once exercised, will continue till registered person revises the option or his annual aggregated turnover exceeds INR 5 Cr.

Opting Out of the Scheme

  • As mentioned earlier also, any taxpayer whose aggregate turnover exceeds Rs. 5 crore during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter and shall be opt out of the Scheme.
  • The time limit for opting out of the Scheme is same as in case of opting in i.e., for a quarter it will be available from first day of second month of preceding quarter to the last day of the first month of the quarter.

Default Option for First Quarter

For the first quarter of the scheme i.e., for the quarter Jan to Mar 2021, all the registered taxpayers whose Aggregate Turnover in the FY 2019-20 was up to ₹ 5 Crore and has not exceeded ₹ 5 Crore turnover in current FY i.e. 2020-21 and have furnished there return in Form GSTR-3B for the month of October 2020 by 30th November 2020, will be migrated by default to QRMP scheme by the GST System.

SI. No. Registered Taxpayer Type Default Option
1 Aggregate Turnover Up to Rs.1.5 Crore- GSTR 1 (Quarterly) in the current financial year Quarterly Return
2 Aggregate Turnover Up to Rs.1.5 Crore- GSTR 1 (Monthly) in the current financial year Monthly Return
3 Aggregate Turnover More than Rs.1.5 Crore up to Rs.5 Crore in the preceeding financial year Quarterly Return

Registered persons are free to change the option as above, if they so desire, from 5th of December,2020 to 31st of January,2021.

Furnishing details of Outward Supplies (Invoice Furnishing Facility-IFF)

  • A taxpayer opting for QRMP Scheme will have the OPTIONAL FACILITY (Invoice Furnishing Facility-IFF) to furnish the details of such outward supplies to a registered person.
  • This facility will be available only for first two months of the quarter and it can be entered between following dates-
  • Month Date Amount of Invoices
    April 1st to 13th May Not exceeding Rs.50 Lakhs
    May 1st to 13th June
  • Benefit of this facility is to allow to upload the invoices on a monthly basis which will be duly reflected in the FORM GSTR-2A and FORM GSTR-2B of the concerned recipients and help them to avail the input tax credit timely.

Monthly Payment of Tax

  • The registered person needs to pay the tax due in each of the first two months of the quarter by depositing the due amount by 25th day of the month succeeding such month in FORM GST PMT-06.
  • At the time of generating the challan, taxpayer should select “Monthly payment for the quarterly taxpayer” as a reason for generating challan.
  • The said person can either use the Fixed Sum Method (pre-filled challan) or the Self-Assessment Method (actual tax due), for a monthly payment of tax for the first two months, after adjusting ITC.

Fixed Sum Method:

There can be two cases under this method-

  • Case I-Last return was filed on Quarterly Basis
    Under this case, 35% of the tax paid in cash in the preceding Quarter to be deposited.
  • Case 2-Last return was filed on Monthly Basis
    Under this case, 100% of the tax paid in cash in the last month of the immediately preceding Quarter to be deposited.

Filing of up-to date tax returns is mandatory for using this fixed sum method.

Self Assessment Method:

Under this method, the tax due can be paid on the basis of tax liability on outward supplies plus RCM on Inward supplies minus Eligible ITC.

If cash balance is available in Electronic Cash Ledger and utilizable, then only balance deposit would be sufficient.

  • The registered person is free to avail any of the above methods for payment in any of the two months of the quarter.
  • No tax to be paid in first two months of the quarter if the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due or where there is nil tax liability.
  • Tax deposited for the first 2 months can only be used for adjusting liability for the respective quarter in Form GSTR-3B and can’t be used for any other purpose till the filing of return for the quarter. A refund for the balance accumulated can only be claimed after filing of GSTR 3B of the respective quarter.

Quarterly filing of GSTR 3B Return

  • Such registered persons would be required to furnish FORM GSTR-3B, for each quarter, on or before 22nd or 24th day of the month succeeding such quarter.
  • In FORM GSTR-3B, they shall declare the supplies made during the quarter, ITC availed during the quarter and all other details required to be furnished therein.
  • The amount deposited by the registered person in the first two months shall be debited solely for the purposes of offsetting the liability furnished in that quarter’s FORM GSTR-3B.
  • However, any amount left after filing of that quarter’s FORM GSTR-3B may either be claimed as refund or may be used for any other purpose in subsequent quarters.
  • In case of cancellation of registration of such person during any of the first two months of the quarter, he is still required to furnish return in FORM GSTR-3B for the relevant tax period.

Interest Payment under QRMP Scheme

Under Fixed Sum Method:

  • No interest would be payable in case the tax due (auto-calculated fixed sum) in the first two months of the quarter is paid and later discharge the entire liability for the quarter by filing FORM GSTR-3B by the due dates.
  • In case such system calculated sum is not deposited by due date in FORM GST PMT-06, interest would be payable at the applicable rate, from the due date of furnishing FORM GST PMT-06 till the date of making such payment.
  • Further, if FORM GSTR-3B for the quarter is not furnished by the due date, interest @ 18% would be payable as per the provisions of Section 50 of the CGST Act for the liability net of ITC.

Under Self-Assessment Method:

  • The taxpayer needs to pay interest @ 18% on the net tax liability which remains unpaid or is paid beyond the due date for each of the first two months of the quarter i.e., in case PMT-06 if filed after 25th of the following month.
  • Further, it is important to note that the taxpayer needs to pay interest @18% if there is any late payment of tax in the third month of a quarter. This stays applicable irrespective of Fixed Sum Method or Self-Assessment Method.

Applicability of Late Fee

  • The late fee will be applicable on the delay in furnishing the quarterly GSTR-3B and GSTR 1 within due date.
  • However, it is clarified that no late fee is applicable for delay in payment of tax in the first two months of the quarter in form GST PMT-06.

Conclusion

This scheme will reduce GST compliance burden significantly for small taxpayers. Taxpayers need to file only 4 GSTR-3B returns instead of 12 GSTR-3B returns in a year.

Further, this may prove beneficial for large players who are currently losing credits due to non-reflection of entries in GSTR 2A since many suppliers are filing GSTR 1 quarterly, thus eventually leading to savings in both time and money. Therefore, it can be seen as another step towards the goal of increasing “Ease of doing business” in India.

The author of this article can be reached at +91-99716-62528 or anita.agrawal@aprafirm.com