Breifing QRMP Scheme and benefit for Small Business

The 42th Council meeting of 2020 held on 05.10.2020, has introduce new Return scheme with some relaxation of monthly return filing for small business registered under GST Act. Here is this Article we discuss in details the notification and circular that has been issued and applicable from 1^st January 2021

Notification Number & Dated	Remarks	Synopsis of Notification
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.	Notifies applicability the amendment of section 39, carried out by section 97 of Finance  Act
Notification No. 82/2020 – Central Tax, dated 10.11.2020.	Makes the Thirteenth amendment (2020) to the CGST Rules 2017.	Specify manner of filing return and introduce IFF
Notification No. 84/2020 – Central Tax, dated 10.11.2020.	Notifies class of persons under proviso to section 39(1) of the CGST Act.	Applies only to Register person, turnover below 5 Cr, Other than ISD,NR, e-commerce, and govt. department
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 2. Various issues related to notifications issued to implement the QRMP Scheme have	Specified  the manner of making payment and method of payment calculation
Circular No. 143/13/2020	–	–

While reading the above notification following question come to our mind:

1. What is QRMP? And To whom it applicable?

2. What are the Silent features of QRMP?

3. How the notified person can opt this option?

4. What is the due date of filing new Scheme Return?

5. What is the manner and method of payment?

6. What is IFF? Will it be beneficial?

7. What are the Silent features of 2B Return?

Each of these questions is addressed below:

Q 1: What is QRMP? And to whom it applicable?

QRMP is Quarterly Return and Monthly Payment Scheme applicable to every registered person who opts for regular registration in the act and having aggregate turnover of up to Five crore in the preceding financial year, which 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, or registered person whose turnover is upto 5 crore in Current Financial year or who have opted to furnish a return for every quarter or monthly and having turnover exceed 1.5 crore and upto 5 crore, under sub-rule (1) of rule 61A of the Central Goods and Services Tax Rules, 2017, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Other than following person are- 

A) Input Service Distributor which covers:

Supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST, SGST, IGST or UTGST paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number of that place.

B) Person paying tax under section 51, means

(1) Department or establishment of the Central Government or State Government; or

(2) Local authority; or

(3) Governmental agencies; or

 (4) Such persons or category of persons as may be notified by the Government on the recommendations of the Council

Who deducted tax deducted at source on inwards supplies of goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees (TDS provisions)

C) Person paying tax under section 52, means

Electronic Commerce operator who is required to collect tax at source (TCS provisions)

D) Casual taxable person and Non-resident taxable person.

 E) Person paying tax under section 10, means

Person opt registration under composition scheme

Q 2: What are the Silent features of QRMP?

• QRMP is Quarterly Return Monthly Payment Scheme.
• It’s an optional Scheme for notified person.
• This Scheme is GSTIN wise, that is, some GSTINs for that PAN can opt for the QRMP Scheme and remaining GSTINs may not opt for the Scheme.
• This Scheme is available on common portal throughout the year.
• Here notified person need to file Quarterly GSTR-1 & GSTR-3B Return.
• Here notified person can pass on GST credit to their purchaser on real time basis, by using IFF facility (i.e. Invoice Furnishing Facility) without submitting quarterly return.
• Here notified person can amend bill submitted through IFF facility before submitting quarterly return.
• Here notified person can pay tax on monthly basis either Self-Assessment or fixed method.
• Here notified person, who opt paying tax by fixed method, are not liable for interest if paid on due date and file GSTR-3B Return on due date.
• Here notified person can discharged liability by depositing tax through Form GST PMT-06.
• Further registered person cover u/s 10, who opt out from it, can subsequently opt this new scheme.
• Further registered person whose aggregate turnover exceed 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.

Q3: How the notified person can opt this option?

• Here Notified person who file Oct-20 GSTR-3B return on or before 30^th November 2020, will be default migrated to this facility for quarter Jan-21 to Mar-2021
• Notified person can opt this option subsequently, if

Such Registered person can opt, from any quarter first day of Second month of preceding quarter to the last day of the first     month of running quarter. Further in order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such option.

For example: A registered person intending to avail of the Scheme for the quarter ‘July to September’ , then he has to exercise this option during 1st of May to 31st of July.

If he is exercising his option on 27th July for the quarter (July to September), in such case, he must have furnished the return for the month of June which was due on 22/24th July.

Q4. What is the due date of filing new Scheme Return? 

Table

S. No.	Class of registered persons	Due Date
(1)	(2)	(3)
1.	Registered persons whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep.	twenty-second day of the month succeeding such quarter.
2.	Registered persons whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi.	twenty-fourth day of the month succeeding such quarter

Registered person who opt new scheme is required to furnish Quarterly Return as per table, namely:-

Note:  Late fees will be applicable for delay in furnishing the Quarterly Return, and not for delay in making payment of GST in first two of that quarter. 

Q 5: What is the manner and method of making payment?

Every registered person who opt new scheme is required to furnished Quarterly return, and has to make monthly payment deposit in Form GST PMT 06, by the twenty fifth day of the succeeding such month.

Provided also that while making a deposit in FORM GST PMT-06, such a registered person may –

(a) For the first month of the quarter, take into account the balance in the electronic cash ledger.

(b) And For the second month of the quarter, take into account the balance in the electronic cash ledger excluding the tax due for the first month.

The amount so deposit by registered person, shall be debited while filing the return for the said quarter in FORM GSTR-3B, and any claim of refund of such amount lying in balance in the electronic cash ledger, if any, out of the amount so deposited shall be permitted only after the return in FORM GSTR-3B for the said quarter has been filed.

As if now registered person, is depositing tax on self assessment basis only, however in this Scheme registered person has been given option of payment, since registered person only need to pay tax for first two month of that quarter, and file return on quarterly basis.

First, Fixed Sum Method: Here, Registered person need to pay thirty five percent in cash by generating a pre-filled challan in FORM GST PMT-06 of tax paid in cash of  the preceding quarter where the return was furnished quarterly; or equal to the tax paid in cash in the last month of the immediately preceding quarter where the return was furnished monthly.

For easy understanding, the same is explained by way of illustration in table below:

i. In case the last return filed was on quarterly basis for Quarter Ending March, 2021:

Tax paid in Cash in Quarter (January – March, 2021)				Tax required to be paid in each of the months – April and May, 2021
	CGST	100			CGST	35
	SGST	100			SGST	35
	IGST	500			IGST	175
	Cess	50			Cess	17.5

ii. In case the last return filed was monthly for tax period March, 2021:

Tax paid in Cash in March, 2021				Tax required to be paid in each of the months – April and May, 2021
	CGST	50			CGST	50
	SGST	50			SGST	50
	IGST	80			IGST	80
	Cess	–			Cess	–

Note : a) Monthly tax payment through this method would not be available to those registered persons who have not furnished the return for a complete tax period preceding such month. A complete tax period means a tax period in which the person is registered from the first day of the tax period till the last day of the tax period

b) In this method registered person mandatory to pay tax in cash after adjusting cumulative cash ledger balance of previous month or quarter.

Self-Assessment Method: Here Registered person, can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit available, in FORM GST PMT-06. In order to facilitate ascertainment of the ITC available for the month, an auto-drafted input tax credit statement has been made available in FORM GSTR- 2B, for every month.

The said registered person is free to avail either of the two tax payment method above in any of the two months of the quarter.

Note : In this method registered person will pay in cash or by availing the credit of input. So if there is credit available in ledger of previous same will be set off in current month/quarter liability.

 Q6: What is IFF? Will it be beneficial?

 IFF is Invoice Furnishing facility, here

 The Notified persons required to furnish return for every quarter the details of such outward supplies of goods or services or both to a registered person, as he may consider necessary, for the first and second months of a quarter, up to a cumulative value of fifty lakh rupees in each of the months, electronically on the common portal, duly authenticated in the manner prescribed under rule 26, from the 1st day of the month succeeding such month till the 13th day of the said month.

Further, the details of outward supplies of goods or services or both furnished using the IFF shall include the –

(a) Invoice wise details of inter-State and intra-State supplies made to the registered persons;

(b) Debit and credit notes, if any, issued during the month for such invoices issued previously.

 And further the details of outward supplies furnished using the IFF for the first and second months of a quarter, shall not be furnished in FORM GSTR-1 for the said quarter. Further register person can amend outward supplies submitted through IFF, before filing GST return of that quarter.

Q7:  What are the Silent features of 2B Return?

• It is Static, that is it will update the input credit details till the due date of filing GSTR-1 Return for previous month.
• It will auto populated in GSTR3B return, for comparing GST input in 3B with books, to avoid future GST input dispute.
• It contains the details of input credit eligible for credit.
• It contains input credit of regular purchase, reverse charge input, import or SEZ input or input service distributor.
• It contains bill wise details, to compare with books on monthly basis.

Conclusion:

The QRMP scheme has been introduced, first for reducing THE BURDEN of the small business, from monthly GST return filing and reduce penalty liability second PROVIDES real time credit of GST input through IFF to large register tax payer person. Hence, if small register unable to pass on credit, on or before 11th of GSTR-1 filing due date of previous month for large register filer, then large register person need to pay tax as per GSTR2B.