A new scheme for return filing under GST for small taxpayers has been introduced, due to which there is a lot of confusion among taxpayers about what they have to do, what they can’t do, how they will pay taxes, when they have to file returns etc.
In these FAQs, I have tried to answer a few of such questions.
Q.1 What is this scheme?
Ans: As the name suggests, this scheme is brought to provide small taxpayers an option to file GSTR 3B return quarterly as opposed to current monthly filing BUT they have to make payment of taxes monthly.
Q. 2 Who is eligible to opt for this scheme?
Ans: A registered Taxpayer who is:
1. Required to file GSTR 3B
2. Has aggregate Turnover up to Rs. 5 Crore in preceding Financial Year
Q. 3 What is the effective date for the QRMP scheme?
Ans: This new Scheme will be effective from 01 January 2021
Q. 4 What will Happen to Taxpayers whose turnover is upto 5 Crores during preceding Financial Year, but have turnover more than 5 Crores during the current year?
Ans: The Taxpayer will not be able to opt for this scheme. In case any taxpayer has opted for the scheme because his turnover is upto 5 crores and afterwards during any quarter his turnover exceeds 5 crores, then he will not able to opt for this scheme in next quarter
Q. 5 When to opt for the QRMP scheme?
Ans: A registered person can opt in for any quarter from the first day of the second month of the preceding quarter to the last day of the first month of the quarter.
In order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such option.
A registered person intending to avail of the Scheme for the quarter ‘July to September’ can exercise his 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.
Q. 6 Whether this option should be exercised every quarter?
Ans: Registered persons are not required to exercise the option every quarter. Where such option has been exercised once, they shall continue to furnish the return as per the selected option for future tax periods, unless they revise the said option or they become ineligible for the scheme
Q. 7 How to opt out from this scheme?
Ans: Any person who has opted for this scheme in previous quarter is free to opt out in next quarter
Q. 8 When can opt out option be exercised?
Ans: The facility for opting out of the Scheme for a quarter will be available from first day of second month of preceding quarter to the last day of the first month of the quarter For Example: If you have opted for QRMP for ‘July to September’ quarter and want to opt out for next quarter i.e. “October to December” then you can exercise such an option from 01 August to 31 October.
Q. 9 What about taxpayers having multiple registrations? Do they have to opt In or opt out option for all GSTINs?
Ans: The option to avail the QRMP Scheme is GSTIN wise and therefore, distinct persons as defined in Section 25 of the CGST Act (different GSTINs on same PAN) have the option to avail the QRMP Scheme for one or more GSTINs. In other words, some GSTINs for that PAN can opt for the QRMP Scheme and remaining GSTINs may not opt for the Scheme.
Q.10 If a taxpayer opt for this scheme then when he has to file GSTR 3B & GSTR 1?
Ans: Taxpayers opting for this scheme should file GSTR 3B & GSTR 1 quarterly
Q. 11 How will taxpayers opting for this scheme transfer ITC in the first two months of the quarter to their customers?
Ans: For each of the first and second months of a quarter, such a registered person will have the facility (Invoice Furnishing Facility- IFF) to furnish the details of such outward supplies to a registered person, as he may consider necessary, between the 1st day of the succeeding month till the 13th day of the succeeding month.
The said details of outward supplies shall, however, not exceed the value of fifty lakh rupees in each month.
It may be noted that after 13th of the month, this facility for furnishing IFF for previous month would not be available
Q. 12 Is IFF mandatory?
Ans: No this is not mandatory and is only an optional facility made available to the registered persons under the QRMP Scheme.
Q. 13 What will be the treatment of invoices already uploaded using IFF in GSTR 1?
Ans: The details of invoices furnished using the said facility in the first two months are not required to be furnished again in FORM GSTR-1. Accordingly, the details of outward supplies made by such a registered person during a quarter shall consist of details of invoices furnished using IFF for each of the first two months and the details of invoices furnished in FORM GSTR-1 for the quarter. At his option, a registered person may choose to furnish the details of outward supplies made during a quarter in FORM GSTR-1 only, without using the IFF.
Q. 14 How and when to make payment under this scheme?
Ans: The registered person under the QRMP Scheme would be required to pay the tax in cash due in each of the first two months of the quarter by depositing the due amount in FORM GST PMT-06, by the twenty fifth day of the month succeeding such month. While generating the challan, taxpayers should select “Monthly payment for quarterly taxpayer” as reason for generating the challan
For January to March Quarter, taxpayer should make payment for the month January on or before 25th Feb and for the Month of February on or before 25th March
Q. 15 How will the taxpayer calculate his Tax liability for the first two months?
Ans: The taxpayer has been provided with two methods to pay his monthly tax:
1. Fixed Sum Method
2. Self-Assessment Method
Q. 16 What is the Fixed Sum Method?
Ans: In this method, a facility is being made available on the portal for generating a pre-filled challan in FORM GST PMT-06 for
1. an amount equal to 35% of the tax paid in cash in the preceding quarter where the return was furnished quarterly;
2. equal to the (100%) tax paid in cash in the last month of the immediately preceding quarter where the return was furnished monthly
Q. 17 What is the Self-Assessment Method?
Ans: In this method taxpayers can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit available using 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.
Q. 18 Can taxpayers switch from Fixed Sum Method to self-assessment method and vice versa during the first two months of quarters?
Ans: Taxpayer is free to avail either of the two tax payment methods above in any of the two months of the quarter.
For January to March Quarter, A taxpayer can choose Fixed Sum Method for January month and Self-Assessment Method for February Month
Q. 19 Do taxpayers have to mandatorily pay tax in cash for the first two months?
Ans: In case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due for the first month of the quarter or where there is nil tax liability, the registered person may not deposit any amount for the said month.
Similarly for the second month of the quarter if the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the cumulative tax due for the first month and second month of the quarter or where there is nil tax liability, the registered person may not deposit any amount for the said month.
Q. 20 Can taxpayers claim a refund for excess tax paid in cash for the first two months?
Ans: Any claim of refund in respect of the amount deposited for the first two months of a quarter for payment of tax shall be permitted only after the return in FORM GSTR-3B for the said quarter has been furnished.
Q. 21 What will be the due date for filing GSTR 1 and GSTR 3B?
Ans: GSTR 1 – 13th of the next month from the end of the quarter GSTR 3B – 22nd or 24th of the next month from the end of the quarter
Q. 22 How interest will be calculated in case of short payment or non-payment for first two months of the quarter?
Ans: For Taxpayer paying using Fixed Sum method:
No interest would be payable in case the tax due is paid in the first two months of the quarter by way of depositing auto-calculated fixed sum amount by the due date (25th of next month) even if it is lesser than the actual liability of the first two months.
In case of non-payment of tax on or before due date Interest will be levied @ 18% p.a. from the due date to the date of actual payment
For Taxpayer paying using Self-Assessment method:
Interest amount would be payable as per the provision of Section 50 of the CGST Act for tax or any part thereof (net of ITC) which remains unpaid / paid beyond the due date for the first two months of the quarter i.e. if actual liability is more than the tax paid for the first two months then the interest will be calculated from due date (i.e. 25th of the next month) to the date of actual payment @ 18% p.a.
Q. 23 What about late fees for late payment of tax?
Ans: No late fees will be levied in case of late payment of tax using Form PMT 06 for first two months However late fees for late filing quarterly GSTR 1 and GSTR 3B will continue as per present system.
Disclaimer: Author tried to provide the answers to various frequently asked questions based on his research and knowledge of the scheme. These are his personal views. One should read the scheme related documents issued by CBIC before giving any consultancy or taking any action
(The Author of these FAQs is practicing at Indore and can also be reached at [email protected])