pri QRMP scheme under GST w.e.f. 01.01.2021 All you need to know about QRMP scheme under GST w.e.f. 01.01.2021

Taking another step towards the goal of increasing “Ease of doing business” in India and providing relief to small taxpayers; the GST Council in their 42nd Meet on 5th October 2020 proposed a quarterly return filing system for small taxpayers to be implemented w.e.f. 1st January, 2021. QRMP or Quarterly Return Monthly Payment 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 8 returns (4 GSTR 1 and 4 GSTR 3B) in a year as compared to 16 returns 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 of Rule 36(4) where their suppliers are filing GSTR 1 quarterly. Now, with the introduction of 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.

Law references

The CBIC on 10th of November, 2020 issued following in respect of QRMP scheme:

SNo. 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 & Conditions

Eligibility Conditions
ü A registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of up to Rs. 5 crores in the preceding financial year

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

ü Return for the preceding month as on the date of exercising option has to be furnished

ü Once option is exercised, it will continue to remain until it is changed, or the taxpayer becomes ineligible.

Note:

  1. The aggregate turnover (PAN wise) of preceding FY will be considered for calculating threshold limit of Rs. 5 cr.
  2. The option can be availed GSTIN wise. Therefore, few GSTINs for that PAN can opt for the Scheme and the remaining GSTINs can remain out of the Scheme.
  3. In case the aggregate turnover exceeds Rs. 5 cr during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter.

Time limit to opt for QRMP Scheme

  • The facility is available online and can be availed throughout the year, in any quarter
  • Option for QRMP, once exercised, will continue till registered person (RP) revises the option or his annual aggregated turnover exceeds INR 5 Cr.

Note: The RPs opting for the scheme can avail the facility of Invoice Furnishing Facility (IFF), so

that the outward supplies to registered person are reflected in their respective Form GSTR 2A & 2B.

Timeline for exercising option under QRMP Scheme during FY 2020-21
Sl. 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

Default Migration for the first quarter of the Scheme:

In order to facilitate the taxpayers, it has been decided that for the first quarter i.e., January 2021 to March 2021, the registered persons having turnover up to Rs 5 cr and who have furnished the return in FORM GSTR-3B for October 2020 by 30th November 2020, shall be migrated on the common portal as indicated below:

S. No. Class of registered person having aggregate turnover Default Option
(a) Up to 1.5 crore rupees & furnished FORM GSTR-1 on monthly basis in the current financial year Monthly Return
(b) Up to 1.5 crore rupees & furnished FORM GSTR-1 on a quarterly basis in the current financial year Quarterly Return
(c) More than 1.5 crore rupees and up to 5 crore rupees in the preceding financial year Quarterly Return

Note:

  1. The taxpayers are advised to furnish the return of October 2020 in time so as to be eligible for default migration
  2. The taxpayers who have not filed their return for October 2020 on or before 30th November 2020 will not be migrated to the Scheme. They will be able to opt for the Scheme once the FORM GSTR-3B as due on the date of exercising option has been filed.
  3. Taxpayers who wish to change the default option should do so between 5th Dec 2020 to 31st January 2020.

When to Opt-Out and How to Opt-out from the Scheme?

  • Any taxpayer whose aggregate turnover has exceeded Rs. 5 cr in the FY 2020-21, shall opt out of the Scheme. The registered person shall not be eligible for the scheme from the next quarter.
  • Similarly, 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.
  • All persons who have obtained registration during any quarter or the registered persons opting out from paying tax under Section 10 of the CGST Act during any quarter shall be able to opt for the Scheme for the quarter for which the opting facility is available on the date of exercising option.

Invoice Furnishing Facility (IFF)

  • The registered persons opting for the Scheme would be required to furnish the details of outward supply in FORM GSTR-1 quarterly as per the rule 59 of the CGST Rule.
  • For each of the first and second month of a quarter, such a registered person will have the 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 Rs. 50 Lakhs 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
  • As a facilitation measure, a feature of continuous upload of invoices would also be provided for the registered persons wherein they can save the invoices in IFF from the 1st day of the month till 13th day of the succeeding month.
  • The facility of furnishing details of invoices in IFF has been provided so as to allow details of such supplies to be duly reflected in the FORM GSTR-2A and FORM GSTR-2B of the concerned recipient.
  • The said facility is not mandatory and is only an optional facility made available to the registered persons under the QRMP Scheme.
  • 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 their 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.

Monthly payment of tax

  • RPs (Registered Persons) need to pay the tax due in each of the first two months by 25th of following month of the Quarter by depositing the due amount in FORM GST PMT-06, by selecting “Monthly payment for the quarterly taxpayer” as a reason for generating Challan
  • RPs 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.
  • RP’s are free to avail any of the above methods for payment in any of the two months of the quarter.
  • No deposit is required for the month if the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due for the 1st month or 1st and 2nd month both 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.

Methods of Monthly Payment of Taxes

Fixed Sum Method Self-Assessment Method
ü A pre-filled challan facility in PMT-06 either 35% (if quarterly return had been filed in previous quarter) and 100% of previous month (if monthly return has been filed for the previous quarter).

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

ü Not available if return for a complete tax period is not filed.

ü Manual computation of taxes to be paid in cash.

ü Tax liability = Liability on outward supplies plus RCM on Inward supplies minus Eligible ITC.

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

Quarterly 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:

Tax due in 1st month PMT-06 filed on 25th Tax due for 2nd month PMT-06 filed on 25th Total liability in the quarter (net of available ITC) Diffe-rence [5-(3+1)] GSTR-3B filed on due date Interest Payable? Remarks
35 YES 35 YES 150 80 YES NO
35 NO 35 YES 150 80 YES YES Interest payable on 35 for no. of days delay in filing 1st month PMT-06
35 YES 35 NO 150 80 YES YES Interest payable on 35 for no. of days delay in filing 2nd month PMT-06
35 YES 35 YES 150 80 NO YES Interest payable on 80 for no. of days delay in filing 3B
35 NO 35 NO 150 80 NO YES Interest to be calculated separately for no. of days delay in 1st month PMT-06, 2nd month PMT-06 and for GSTR 3B

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, i.e., Rs. 50 per day (CGST:SGST) subject to a maximum late fees of Rs 5,000.
  • 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.

Return Due Dates

Return filing due dates w.e.f 1st Jan 2021
Category of Taxpayers GSTR-1 Invoice Filing Facility PMT- 06 for M 1 PMT-06 for M 2 GSTR-3B
Taxpayers who are required to file monthly returns:

(whose ATO TO is more than 5 Cr. Or who have not opted from QRMP Scheme)

11th of the following month NA NA NA 20th of the following month
Taxpayers who have opted for QRMP Scheme 13th day of the month following the quarter 1st to 13th day in M 1 and M 2 25th day of the month following M 1 25th day of the month following M 2 22nd or 24th day of the month following the quarter

Conclusion

This scheme is a welcoming move that will provide more flexibility in compliance for small taxpayers. Further, this may prove to be a blessing for not only the small taxpayers but also 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. Also, from the government’s perspective, this is scheme is expected to plug revenue leakages and frauds as it could turn out to be a significant tool to curb the ongoing menace of fake invoicing vis-a-vis fake credits. Therefore, it seems that everybody would be in a win-win situation after the successful implementation of the QRMP scheme.

FAQs

  • How and when to avail for QRMP Scheme?

Ans: The facility to avail the Scheme on the common portal would be available throughout the year. A registered person 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. For example, registered person intending to avail of the Scheme for the quarter ‘July to September’ can exercise this option during 1st of May to 31st of July. However, registered persons are not required to exercise the option every quarter.

  • Whether the option to avail the QRMP Scheme is GSTIN wise?

Ans: Yes, the option to avail the QRMP Scheme is GSTIN wise (some GSTINs for a PAN can opt for the QRMP Scheme and remaining GSTINs may not opt for the Scheme) and once it is exercised it would be valid for future tax periods.

  • What are the details the registered person will have to furnish quarterly and what is the meaning of Invoice Furnishing Facility (IFF)?

Ans: The registered persons opting for the Scheme would be required to furnish the details of outward supply in Form GSTR-1 on quarterly basis. Invoice furnishing facility (‘IFF’) has been introduced in respect of reporting the invoice for details of supply made to registered persons for the first two months of the quarter. The supplier can upload these invoices on monthly basis. Notably, the taxpayer can upload maximum of Rs 50 Lakhs invoices in each of the two months of quarter. The IFF facility is optional. The details of invoices furnished under this facility in the first two months are not required to be furnished again in Form GSTR-1.

  • How to get enrolled in this scheme, whether the eligible person can migrate directly?

Ans: To avail the benefit of this scheme, it has been clarified that all the registered persons, whose aggregate turnover for the FY 2019-20 is up to Rs 5 crore and who have furnished the return in Form GSTR-3B for the month of October 2020 by 30th November 2020, shall be automatically migrated on the common portal.

  • How to make Monthly Payment of Tax and what is the due date of payment?

Ans: The registered person under the QRMP Scheme would be required to pay the tax due in each of the first two months of the quarter by depositing the due amount in Form GST PMT-06 and the amount of tax shall be deposited by the 25th day of next month.

  • What is the due date for the registered person opting for Quarterly Filing of GSTR-3B?

Ans: The registered persons opting for the QRPM Scheme would be required to furnish Form GSTR-3B, for each quarter, on or before 22nd or 24th day of the month succeeding such quarter for Class A States and Class B States respectively.

  • When and how a registered taxpayer can opt Out of this Scheme?

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. It is also clarified that such registered person, whose aggregate turnover crosses 5 crore rupees during a quarter in current financial year, shall opt for furnishing of return on monthly basis from the succeeding quarter.

The article is written by CA Mannu Kashliwal, Anand Sharma and Bichitra Bijoy Bhattacharjee. Special thanks to CA Ashish Chaudhary for vetting the article. Please provide your feedback or views to the writer at mannu@hiregange.com.

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12 Comments

  1. John says:

    Hi,

    Can details of outwards supply that were not filed for M1 be filed along with M2 under the QRMP scheme?

    Also, the system does not seem to allow the payment of tax from ITC outstanding because the details of outwards supply was not filed before the 13th (and the system no longer allows these details to be uploaded). Is there a work-around to use ITC to pay the tax? Or, is the only option to pay the tax through bank/cash?

  2. Sourabh Singal says:

    What if nothing is paid in cash in the previous return to quarter (whether monthly or quarterly). Then how the Fixed sum method will be available??

    Say in Dec 20, a person has filed Nil Return Now in January he has transactions, then payment will be made on which basis if he want to opt for fixed sum method..?

  3. Rajesh R says:

    Can we continue with the current method of filing returns even though we are eligible for QRMP?
    i.e. filing GSTR 3B on a monthly basis (where we make the payments along with it) and GSTR-1 on a quarterly basis where we furnish the details of invoices.

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