Quarterly Return & Monthly Payment (QRMP) Scheme in GST

The Central Board of Indirect Taxes & Customs (CBIC) introduced an option to file returns on a Quarterly basis and Payment of GST on a Monthly basis under GST to help small taxpayers whose turnover is less than Rs.5 crores.

This scheme is called the QRMP Scheme. This scheme allows the taxpayers to file GSTR-3B on a quarterly basis and pay tax every month.

[dropcap]Q[/dropcap]RMP Scheme is an optional scheme that CBIC has rolled out for small scale businesses having aggregate turnover up to 5 crore rupees to furnish return on a quarterly basis along with monthly payment of tax. Thus, the small taxpayers would only need to file only 8 returns (4 GSTR 1 and 4 GSTR 3B) in a year as compared to 16 returns (4 GSTR 1 and 12 GSTR 3B) a year at present.

This scheme would bring in a big relief to those taxpayers who may have been losing their eligible credits due to compliance with Rule 36(4) where their suppliers are filing GSTR 1 quarterly. Now, with the introduction of the QRMP scheme, Invoice Furnishing Facility (IFF) will help the taxpayers to opt for quarterly filing of returns (GSTR-1 as well as GSTR-3B) and simultaneously upload the invoices on a monthly basis which will be duly reflected in the GSTR-2A and GSTR-2B of the customer based on which the customer can avail the input tax credit timely.

Provisions of Law:

S.No.	Law References	Purpose
1	Notification No. 81/2020-Central Tax, dated 10-11-2020	Notifies amendment carried out in sub-section (1), (2) and (7) of section 39 of the CGST Act vide Finance (No.2) Act, 2019.
2	Notification No. 82/2020-Central Tax, dated 10-11-2020	Makes the Thirteenth amendment (2020) to the CGST Rules 2017.
3	Notification No. 84/2020-Central Tax, dated 10-11-2020	Notifies class of persons under proviso to section 39(1) of the CGST Act.
4	Notification No. 85/2020-Central Tax, dated 10-11-2020	Notifies special procedure for making payment of tax liability in the first two months of a quarter.
5	Circular No. 143/13/2020-GST dated 10.11.2020	Explain the scheme in simple terms.

Eligibility for the QRMP scheme

A registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of up to 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme. Further, in case the aggregate turnover exceeds five crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the scheme from the next quarter.

It is clarified that the 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.

The quarterly GSTR-3B filing option will be available from 1st January 2021 onwards. It is clarified that this scheme is optional and can be availed based on GSTIN.

Also Read: Advisory on Quarterly Returns with Monthly Payment Scheme

Exercising Option for QRMP Scheme

A registered person who intends to file his GSTR-3B quarterly should indicate the same on GST portal, from the 1st of the second month of the preceding quarter until the last day of the first month of the quarter for which such option is being exercised.

For example: If A wishes to file quarterly returns for the quarter of Jan-Mar 2021, he should opt for quarterly filing on the common GST portal between 1st November 2020 and 31st January 2021.

Once the registered person has opted for quarterly filing, he will have to continue to furnish his return every quarter for all future tax periods, except in the following situations:

1. If the taxpayer becomes ineligible for furnishing a quarterly return (for example, if the aggregate turnover crosses Rs.5 crore during a quarter, then from the next quarter he will not be able to file quarterly returns).
   If the taxpayer opts to furnish GSTR-3B on a monthly basis.
2. A registered person will not be eligible to opt for furnishing quarterly returns if the last return, which was due on the date of exercising such an option has not been furnished.

For example: If the person is opting for quarterly GSTR-3B filing on 1st December 2020, he will need to furnish his GSTR-3B return for October 2020, which would have been the last return due on the date of exercising the quarterly filing option.

Deemed monthly/quarterly filing of GSTR-3B

The taxpayer has to follow the above procedure to opt for the quarterly GSTR-3B. However, the GSTN case of registered persons falling in the categories specified in the table below, who have furnished their GSTR-3B return for October 2020 by 30th November 2020, it shall be deemed that they have opted for monthly or quarterly filing as detailed below-

S No.	Class of Registered Persons	Deemed Option
1	Registered individuals with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 quarterly in the current financial year	Quarterly GSTR-3B
2	Registered persons with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 monthly in the current financial year	Monthly GSTR-3B
3	Registered persons having an aggregate turnover exceeding Rs.1.5 crore and up to Rs.5 crore in the preceding financial year	Quarterly GSTR-3B

The taxpayers referred to in the Sl. No. 2 in the above table can change the default option and opt for quarterly GSTR-3B filing between 5th December 2020 and 31st January 2021.

Furnishing of details of outward supplies under section 37

The taxpayers who opted for the QRMP scheme can use the Invoice Furnishing Facility (IFF) which allows quarterly GSTR-1 filers to upload their invoices every month. However, the IFF can be used only when a taxpayer whose turnover is up to Rs.1.5 crore. One should keep the following points in mind before utilizing the IFF:

• The IFF can be utilized only for the first two months of a quarter.
• The invoices relating to the last month of a quarter are to be uploaded in the GSTR-1 return only.
• There is no requirement to upload invoices in GSTR-1 if the same has been uploaded in the IFF.
• The taxpayer has to submit the B2B invoice details of sale transactions (both inter-state and intra-state) along with debit and credit notes of the B2B invoices issued during the month.
• The total net value of invoices that can be uploaded is restricted to Rs.50 lakh per month.
• The details submitted in IFF will be reflected in the GSTR-2A, GSTR-2B, GSTR-4A, or GSTR-6A of the recipients as the case may be.
• The Invoice Furnishing Facility will come into effect from 01.01.2021.

Note: There might be a situation where a taxpayer aggregate turnover is more than 1.5 crore but below Rs. 5 crore and those taxpayers can not avail IFF utility to report their outward supplies. In such cases, they can opt for the QRMP scheme, but they have to submit their outward supplies in GSTR-1 on a monthly basis.

Monthly tax payments under the QRMP scheme

The taxpayer has to deposit tax using form GST PMT-06 by the 25th of the following month, for the first and second months of the quarter. The taxpayers can pay their monthly tax liability either in the Fixed Sum Method (FSM) or Self Assessment Method (SAM).

Fixed Sum Method (FSM):

The taxpayer must pay an amount of tax mentioned in a pre-filled challan in the form GST PMT-06 for an amount equal to 35% of the tax paid in cash.

S No	Type of Taxpayer	Tax to be paid
1	Who furnished GSTR-3B quarterly for the last quarter	35% of tax paid in cash in the preceding quarter
2	Who furnished GSTR-3B monthly during the last quarter	100% of tax paid in cash in the last month of the immediately preceding quarter

Example of understanding FSM:

Case1: If GSTR-3B for January 2021 to March 2021 was filed on a quarterly basis

Tax paid in cash during Jan’21 – Mar’21 quarter			The tax required to be paid in each of Apr’21 and May’21
CGST	1000		CGST	350
SGST	1000		SGST	350
IGST	2000		IGST	700
Cess	300		Cess	105

 Case 2: If GSTR-3 was filed on a monthly basis during the quarter of January 2021 to March 2021

Tax paid in cash during Mar’21			The tax required to be paid in each of Apr’21 and May’21
CGST	3,000		CGST	3,000
SGST	3,000		SGST	3,000
IGST	5,000		IGST	5,000
Cess	1,000		Cess	1,000

Self Assessment Method (SAM):

This is the existing method where a taxpayer can pay the tax liability by considering the tax liability on inward and outward supplies and the input tax credit available. The taxpayer has to manually arrive at the tax liability for the month and has to pay the same in form GST PMT-06. For ascertaining the amount of ITC available for the month the taxpayer can use form GSTR-2B.

There are certain instances where no amount may be required to be deposited, such as –

• 1. For the first month of the quarter – where the balance in the electronic cash/credit ledger is adequate for the tax liability of the said month OR where the tax liability is nil.
  2. For the second month of the quarter – where the balance in the electronic cash/credit ledger is adequate for the cumulative tax liability for the first and second months of the quarter OR where the tax liability is nil.

It is to be noted that a registered person will not be eligible for the said procedures unless he has furnished the return for the complete tax period preceding such month. A complete tax period is a tax period where the said person is registered from the first until the last day of the tax period.

Due dates for filing quarterly GSTR-3B

The due dates filing quarterly GSTR-3B has been notified as follows:

S No	GST Registration in States and Union Territories	Due Date
1	Chhattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli, Daman and Diu, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman, and Nicobar Islands, Telangana and Andhra Pradesh	22nd of the month succeeding such quarter
2	Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Mizoram, Manipur, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, and Odisha	24th of the month succeeding such quarter

Applicability of Interest under QRMP scheme

The interest will be applicable as follows if the taxpayer opts for Fixed Sum Method (FSM):

S No	Scenario	Interest to be paid
1	Tax liability mentioned in pre-filled form GST PMT-06 is paid by 25th of the following month	Nil
2	Tax liability mentioned in pre-filled form GST PMT-06 is not paid by 25th of the following month	18% of the tax liability (from 26th of the following month till the date of payment)
3	The final tax liability for the first two months is less than or equal to the amount paid through pre-filled form GST PMT-06	Nil
4	The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has been paid within the quarterly GSTR-3B due date	Nil
5	The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has not been paid within the quarterly GSTR-3B due date	18% of the tax liability (from GSTR-3B due date* till the date of payment)

*22nd or 24th of the month succeeding such quarter based on the state of the taxpayer.

The interest will be applicable as follows if the taxpayer opts for Self Assessment Method (SAM):

The taxpayer has to pay interest @ 18% on the net tax liability which remains unpaid or paid beyond the due date for the first two months of the quarter.

It is important to note that the taxpayer has to pay an interest of @18% if there is any late payment of tax in the third month of a quarter. This is applicable irrespective of the Fixed Sum Method (FSM) or Self Assessment Method (SAM).

 

Applicability of Late fee under QRMP scheme

The late fee should be paid as follows if the quarterly GSTR-3B is not filed within due date, subject to a maximum late fees of Rs 5,000:

Name of the Act	Late fee for every day of delay	Late fee for every day of delay (in case of ‘Nil’tax liability)
CGST Act	Rs.25	Rs.10
SGST Act	Rs.25	Rs.10
IGST Act	Rs.50	Rs.20

 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.

Read here also: https://taxclue.in/quarterly-return-and-monthly-payment-qrmp-scheme-in-gst/