Outline of Quarterly Return Monthly Payment Scheme under GST
Nowadays, the Central Government is working to overhaul the GST Return Filing System with an aim to offer some relief to those taxpayers who are earning an aggregated business turnover of less than Rs 5 crores. In this regard, CBIC by way of Circular No 20/01/08/2020 has released some notifications to prescribe a new scheme of GST returns filing for such taxpayers, known as Quarterly Return Monthly Payment Scheme or QRMP scheme.
In this blog, we will discuss in detail the Quarterly Return Monthly Payment Scheme as outlined by CBIC through its recent circulars and notification.
Eligibility Criteria for QRMP Scheme
Any registered person who needs to furnish a GST Return in Form GSTR 3B must have an aggregate business turnover of Rs 5 crore in the previous financial year.
Further, it is clarified by CBIC or Central Bureau of Indirect Taxes and Customs that the aggregate annual business turnover for the previous financial year will be determined in the common portal after taking into account the details and information furnished in the GST Returns by the taxpayer for the tax periods in the previous financial year.
However, if in case the aggregate annual turnover exceeds Rs 5 crore in any quarter in the current financial year, then the registered person will not be qualified for this scheme from the next quarter.
Effective Date for Quarterly Return Monthly Payment Scheme
The effective date or the date of implementation for the QRMP scheme is 01.01.2021.
Option to Choose QRMP Scheme
The key points to consider while choosing QRMP or Quarterly Return Monthly Payment Scheme are as follows:
Mode and Timeline for Choosing this Scheme
A taxpayer can avail of or choose QRMP Scheme throughout the year by visiting the official GST Portal.
Further, as per Rule 61A of the CGST Rules 2017 or Central Goods and Services Tax Rules 2017, a person registered can choose for any quarter from the first day of the second month of the previous quarter to the last day of the first month of such quarter.
However, to use this option, the said taxpayer needs to furnish the return due on the date of exercising such an option.
Any registered person who intends to avail of QRMP Scheme for the quarter “January to March” can use his/her option between 01.10.2020 to 31.12.2020
However, if he/she exercises his/her option on 27.12.2020 for the quarter (January to March), then in such a case, he/she must have filed the GST Return filing for the month of December, which was due on 22.01.2021 or 24.01.2021.
Can I Choose this Option in Each Quarter
No, a registered person is not allowed to exercise the option of Quarterly Return Monthly Payment scheme in every quarter. That means when the taxpayer has used such option once, he/she will continue using the same option for the future tax periods as well unless he/she revise the said option.
Migration in Quarterly Return Monthly Payment Scheme
For the first quarter of the Quarterly Return Monthly Payment scheme, i.e., from 01.01.2021 to 31.03.2021, CBIC has declared that all the taxpayers who are having an annual business turnover of Rs 5 crores or more and who have furnished their return in Form GSTR 3B for the month of October 2020 by 30.11.2020, will be migrated on to the common portal as mentioned below.
Thus, taxpayers are advised to submit their GST Return for the month of October on time, so as to become eligible for default migration.
However, it shall be relevant to state that the taxpayers who are unable to furnish their return for the month of October, on or before 30.11.2020 will not be eligible for migration. Also, they will not be able to choose the scheme when Form GSTR 3B as due on the date of exercising the option has been filed.
|Class of the Registered Persons||Deemed Option|
|Registered Persons who are having an aggregated business turnover of up to Rs 1.5 crores and who have furnished Form GSTR1 on a quarterly basis in the present financial year||Quarterly Return|
|Registered Persons who are having an aggregated business turnover of up to Rs 1.5 crores and who have furnished Form GSTR 1 on a monthly basis in the present financial year||Monthly Return|
|Registered Persons who are having an aggregated business turnover of more than Rs 1.5 crores and up to Rs 5 crore in the previous financial year||Quarterly Return|
Automatic Change to Default Option
Any taxpayer who wants to automatically change to either of the default options mentioned above, then he/she can do the same in between 05.12.2021 to 31.01.2021.
Also, it shall be taken into consideration that the option to switch the tax period shall be accessible from the month of December 2020, when the new system is put in place.
Newly Registered Taxpayers Choosing Regular Scheme
All the persons who have acquired registration under any quarter or are opting out from paying tax under the composition scheme, as specified under section 10 of the CGST Act 2017 during any quarter will be eligible to choose Quarterly Return Monthly Payment scheme for the quarter for which the facility to choose is available on the date of exercising the option.
Aggregate Annual Business Turnover crosses Rs 5 crores
Whenever the aggregate annual business turnover of a taxpayer exceeds the threshold of Rs 5 crores in any quarter, then he/she will not remain eligible for Quarterly Return Monthly Payment Scheme from next quarter.
Option Available for GSTIN or PAN
Further, CBIC has clarified that the option to avail of Quarterly Return Monthly Payment Scheme is available GSTIN wise. Thus, distinct persons as defined under Section 25 of the CGST Act have the option to benefit from the QRMP Scheme for one or more than one GSTINs.
In short, some GSTINs (Goods and Service Tax Identification Number) can opt for QRMP Scheme for that PAN and whereas some may be able to opt for the scheme.
Submission of Details Concerning Outward Supplies
The registered persons who are opting for the Quarterly Return Monthly Payment Scheme will need to furnish their details of outward supplies in Form GSTR 1 on a quarterly basis.
Further, the key points regarding the submission of details concerning outward supplies are as follows:
Invoicing Furnishing Facility
As per the ongoing return filing mechanism, i.e., pre QRMP scheme regime, any registered person who is having an aggregate annual business turnover up to Rs 1.5 crores, have been given a choice of filing their quarterly returns, i.e., Form GSTR 1 and GSTR 3B.
However, as per practical considerations, such a registered person is unable to avail of the benefit of filing a quarterly return, due to the non-reflection of the corresponding Input Tax Credit (ITC) in form GSTR 2A and form GSTR 2B of their respective goods or services recipient.
Therefore, such recipients, comprising of some big dealers and corporate houses have become hesitant in purchasing goods and services from these small registered persons, who have chosen for the filing of GST Returns on a quarterly basis.
So, to do away with similar practical difficulties, CBIC has announced the implementation of IFF (Invoice Furnishing Facility) on the GSTN portal.
Also, as per Rule 59 of the CGST Rules, all the registered dealers who are choosing QRMP scheme need to furnish the details concerning outward supplies in Form GSTR 1 on a quarterly basis.
Invoicing Furnishing Facility Optional in Nature
It shall be significant to note that the invoicing furnishing facility is not of mandatory nature and is available only as an optional facility to the registered persons under the Quarterly Return Monthly Payment Scheme.
Applicability of IFF
For the first and second month of the quarter, a registered person can have access to IFF to submit the details of the outward supplies, as he may deem necessary, between 1stof the coming month till the 13th of the coming month.
However, the said details must not exceed the threshold of Rs 50 lakhs in each month. Also, it shall be significant to note that after 13th of the coming month, the facility to submit IFF for the previous month will not be available.
Further, as a measure of facilitation, the registered taxpayer will be able to upload continuous invoices from the 1st day of the coming month to 13th day of the coming month. Also, such a facility has been offered to allow reflection of supply details in Form GSTR 2A and GSTR 2B of the said recipient.
No Need to Report Form GSTR 1 Again
As per this head, there is no need to furnish the details of the tax invoices again and again in Form GSTR 1, if the registered person has already submitted the same for the first two months.
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Monthly Tax Payment in Form GST PMT 06
Every registered person under the Quarterly Return Monthly Payment Scheme needs to pay the outstanding tax for 1st two months of the quarter by depositing the amount due in Form GST PMT 06 by the 25th day of the succeeding month.
Further, while generating the challan, a taxpayer needs to choose ‘Monthly Payment for Quarterly Taxpayer’ as the reason behind challan generation.
Options for Paying Tax
The two options for paying tax are as follows:
Fixed Sum Method
A facility has been made accessible on the GST portal for the generation of pre-filed challan in Form GST PMT 06 for a sum equal to 35% of the tax paid in cash in the previous quarter or equal to the cash paid as tax in the last month of the quarter, in which the monthly return was furnished.
Self Assessment Method
Further, a taxable person who has chosen self assessment method needs to pay the tax after considering inward and outward supplies and ITC available in Form GST PMT 06.
Also, to facilitate ascertainment of Input Tax Credit available for a month, an auto-drafted ITC statement has been provided in Form GSTR 2B for every month.
Can Choose Either of the Options
A registered person is free to choose either of the two payment methods mentioned above, i.e., the fixed Sum method or Self Assessment method in any of the two months of the quarter.
No Need to Deposit in case of Adequate Balance
If in case there is an adequate amount of balance available in the electronic cash or credit ledger for the amount due or if there is a nil tax liability, then the registered person may not deposit any tax for the said month.
Also, if the same situation remains for the second month of the quarter, then again, there is no need for the taxpayer to deposit any tax for the said month.
Refund of Excess Deposit
Any refund claim with regard to the amount deposited for the first 2 months of the quarter for tax payment will be permitted only after filing return in Form GSTR 3B for the said quarter. Also, the deposit will not be used for any other purpose than return filing for the quarter.
Filing of Form GSTR 3B on Quarterly basis
All the registered taxpayers who have chosen Quarterly Return Monthly Payment Scheme needs to file Form GSTR 3B for each quarter, on or prior to 22nd or 24th of the coming month.
Further, all the details concerning supplied made, ITC availed, etc. are covered under Form GSTR 3B.
Also, the amount deposited by the registered person for the first two months will solely be debited for the purpose of offsetting the liability determined in that quarter. However, it shall be relevant to state that if in case there is any amount left for that quarter after filing Form GSTR 3B, the same will be claimed as refund or may be used for any other motive in the subsequent quarters.
Cancellation of Registration
If in case the taxpayer decides to cancel his/her registration during any of the first two months of the quarter, still he/she will need to furnish a GST Return in Form GSTR 3B for the pertinent tax period.
Payment of Tax by Fixed Sum Method
It shall be relevant to state that there is no need for the applicant to pay any interest if in case the tax due is paid by him/her through auto-calculated fixed sum method. However, while submitting the form, it is found in any of the first two months, that the tax liability on the supplies made is more than the amount paid in the challan, then, in that case, no interest will be charged by the registered person. But the same is possible only if he/ she discharges the whole of his/her quarter’s liability in Form GSTR 3B up to the due date.
Charging of Interest in case of Delay
If in case the taxpayer is unable to pay the tax due in Form GST PMT 06 up to the due date, then interest will be charged on the same at the applicate rates, starting from the date of filing Form GST PMT 06 till the date of making payment.
Further, it shall be relevant to note that, if in case the taxpayer is unable to file Form GSTR 30 till the due date, then interest will be charged as per the provisions of section 50 of the CGST Act. Also, the interest levied on the tax liability will be discharged through cash.
Payment of Tax by Self Assessment Method
If in case a taxpayer calculates his her liability by self assessment method but was unable to discharge the same on time, then the interest will be levied as per the provisions of section 50 of the CGST Act. However, in this case, the interest will be paid by way of Form GSTR 3B itself.
Late Fees Payment
The concept of Late Fee is applicable whenever there is a delay in furnishing details of outward supply or return.
As per Quarterly Return Monthly Payment Scheme, no late fee will be charged for the delay caused in payment of tax for the first two months of the quarter.
In a nutshell, the main aim behind the implementation of Quarterly Return Monthly Payment Scheme was to offer some relief to those taxpayers who are earning an aggregated business turnover of less than Rs 5 crores.
Further, the idea of Quarterly Return Monthly Payment Scheme was proposed by GST Council in its 42nd GST Council Meeting held on 05.10.2020. Also, the effective date or the date of implementation for the QRMP scheme is 01.01.2021.
Also, CBIC has clarified that the option to avail of Quarterly Return Monthly Payment Scheme is available GSTIN wise.
For any other detail, reach out to Swarit Advisors, we have a team of experts who are proficient in providing services, such as GST Registration and GST Return Filing.