Quarterly Return Monthly Payment (QRMP ) Scheme under GST

1. Quarterly Return Monthly Payment Scheme (QRMP) is a scheme notified by the Government allowing a registered person having aggregate turnover up to five (5) crore rupees to furnish return on a quarterly basis along with monthly payment of tax. CBIC vide circular no. 20/01/08/2020- GST dated 10 November 2020 clarified various issues related to the QRMP scheme

2. Effective Date – The scheme will be implemented with effect from 01 Jan 2021.

3. Eligibility for the 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.

3.1 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.

3.2 In case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter.

4. Exercising option for QRMP Scheme: 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.

4.1 Example: A registered person intending to avail /opt-out of the Scheme for the quarter ‘July to September’ can exercise his option during the 1st of May to 31st of July.

4.2 Similarly, the persons who have obtained registration during any quarter or the registered persons opting out from paying tax under composition scheme during any quarter shall be able to opt any time   between 1^st May to 31^st July for July to Sep Quarter (first day of the second month of preceding quarter to the last day of the first month of the quarter)

4.3 In order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such an option.

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

4.5   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

5. Default Migration for the first quarter of the Scheme: The scheme will be applicable w.e.f 01. Jan 2021. 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 crores and 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 :

5.1 The taxpayers are advised to furnish the return of October 2020 in time so as to be eligible for default migration

5.2 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.

6. Change from the default option of filing Return Periodicity The default option has been provided for the convenience of registered persons. Such registered persons are free to change the option as above if they so desire. For the first quarter of the scheme, the changes can be done from the 5th of December, 2020 to 31st of January, 2021.

6.1 Example, A taxpayer having turnover up to 5 crores whose default option on the portal for Jan-Mar 21 quarter has been migrated as quarterly wish to file monthly return. He can change the option as monthly any time from 5th Dec 2020 to 31st Jan 2021.

6.2. Opt-Out from the Scheme on turnover exceeds Rs 5 Crores: In case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter. Such registered person, whose aggregate turnover crosses 5 crore rupees during a quarter in current financial years, shall opt for furnishing of return on a monthly basis, electronically, on the common portal, from the succeeding quarter.

7. GSTIN Wise Option is available:- The option to avail of the QRMP Scheme is GSTIN wise and therefore, distinct persons (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.

8. Quarterly Filing of GSTR 1 :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.

8.1 Invoice Furnishing Facility : A registered person will have the Invoice Furnishing Facility( IFF) to furnish the details for each of first and second month of  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. This facility for furnishing IFF for previous month would not be available after 13th of the month

8.2 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.

8.3 The said details of outward supplies shall, however, not exceed the value of fifty lakh rupees in each month.

8.4 As a facilitation measure, 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.

8.5 For example, a registered person who has availed the Scheme wants to declare two invoices out of the total ten invoices issued in the first month of quarter since the recipient of supplies covered by those two invoices desires to avail ITC in that month itself. Details of these two invoices may be furnished using IFF. The details of the remaining 8 invoices shall be furnished in FORM GSTR-1 of the said quarter.

8.6 The two invoices furnished in IFF shall be reflected in FORM GSTR-2B of the concerned recipient of the first month of the quarter and remaining eight invoices furnished in FORM GSTR-1 shall be reflected in FORM GSTR -2Bof the concerned recipient of the last month of the quarter.

8.7 The said facility would however be available, say for the month of July, from 1st August till 13th August. Similarly, for the month of August, the said facility will be available from 1st September till 13th September.

8.8 The  facility is not mandatory and is only an optional facility made available to the registered persons under the QRMP Scheme.

8.9 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.

8.10 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.

9. Monthly payment of Tax: The registered person under the QRMP Scheme would be required to pay the tax due on monthly basis in each of the first two months of the quarter.

9.1 The Form ‘PMT 06’ is required to be used for the purpose.

9.2 The due date of tax payment is the 25th of the succeeding month.

9.3 While generating the challan, taxpayers should select “Monthly payment for the quarterly taxpayer” as a reason for generating the challan.

10. Method to calculate Monthly payment of Tax The taxpayer is free to avail either of the following two options provided below for monthly payment of tax during the first two months:-

10.1 Fixed Sum Method:  A taxpayer who has furnished a quarterly return in a preceding quarter can opt to pay 35% of the tax paid in cash in the preceding quarter.

10.1.1 Example: The last return filed was on a quarterly basis for the Quarter Ending March 2021. The amount required to be paid in each of the two months in the subsequent quarter based on the amount paid in the last quarter will arrive as follows

In case, the registered person has furnished a monthly return, he can opt to pay an amount equal to the tax paid in the last month of the preceding quarter. The last return filed was monthly for the tax period of March 2021

10.1.2. A facility is being made available on the portal for generating a pre-filled challan in FORM GST PMT-06 for the above payments.

10.1.3.Non- availability for Monthly Tax Payment facility: 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.

10.1.4.  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.

10.2 Self-Assessment Method The registered person can pay the tax due by considering the tax liability on inward and outward supplies and the Input Tax Credit available.

10.2.1.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.

11. Non- a requirement of Monthly Tax deposit: In case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due (for the first month or cumulative dues in the second month) or where there is a nil tax liability, the registered person may not deposit any amount for the said months.

12. Refund Claim: The claim of refund in respect of the amount deposited for the first two months of a Quarter for payment of tax shall be permitted after the return in FORM GSTR-3B for the said quarter has been furnished. Further, this deposit cannot be used by the taxpayer for any other purpose till the filing of return for the quarter.

13. Quarterly filing of FORM GSTR-3B The registered persons would be required to furnish FORM GSTR-3B, for each quarter, on or before the 22nd or 24th day of the month succeeding such quarter.

13.1  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.

13.2 The amount deposited by the registered person in the first two months shall be debited solely to offset the liability furnished in that quarter’s FORM GSTR-3B.

13.3  However, any amount left after the filing of that quarter’s FORM GSTR-3B may either be claimed as a refund or may be used for any other purpose in subsequent quarters.

13.4  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 a return in FORM GSTR-3B for the relevant tax period.

14. Applicability of Interest: No interest would be payable in case the tax due is paid in the first two months of the quarter by way of depositing an auto-calculated fixed sum amount  by the due date

14.1  In case such payment of tax by depositing the system calculated amount in FORM GST PMT-06 is not done by the due date, interest would be payable at the applicable rate, from the due date of furnishing FORM GST PMT-06 till the date of making such payment.

14.2 While furnishing quarterly return in FORM GSTR-3B, if it is found that in any or both of the first two months of the quarter, the tax liability net of available credit on the supplies made /received was higher than the amount paid in the challan, then, no interest would be payable provided the person deposit system calculated amount for each of the first two months and discharge entire liability for the quarter in the FORM GSTR-3B of the quarter by the due date.

14.3 Further, in case of FORM GSTR-3B for the quarter is furnished beyond the due date, interest would be payable as per the provisions of Section 50 of the CGST Act for the tax liability net of ITC.

Illustration 1 –

A registered person, who has opted for the Scheme, had paid a total amount of Rs. 100/- in cash as tax liability in the previous quarter of October to December. He opts to pay tax under the fixed sum method. He, therefore, pays Rs. 35/- each on 25th February and 25th March for discharging tax liability for the first two months of quarter viz. January and February. In his return for the quarter, it is found that liability, based on the outward and inward supplies, for January was Rs. 40/- and for February it was Rs. 42/-. No interest would be payable for the lesser amount of tax (i.e. Rs. 5 and Rs. 7 respectively) discharged in these two months provided that he discharges his entire liability for the quarter in the FORM GSTR-3B of the quarter by the due date.

Illustration 2 –

A registered person, who has opted for the Scheme, had paid a total amount of Rs. 100/- in cash as tax liability in the previous quarter of October to December. He opts to pay tax under the fixed sum method. He, therefore, pays Rs. 35/- each on 25th February and 25th March for discharging tax liability for the first two months of quarter viz. January and February.

In his return for the quarter, it is found that total liability for the quarter net of available credit was

Rs. 125 but he files the return on 30th April. Interest would be payable at the applicable rate on Rs. 55 [Rs. 125 – Rs. 70 (deposit made in cash ledger in M1 and M2)] for the period between the due date of quarterly GSTR 3B and 30th April

14.4 For a registered person making payment of tax by opting for the Self-Assessment Method, the 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.

14.5 Interest payable, if any, shall be paid through FORM GSTR-3B.

15. Applicability of Late Fee – Late fee is applicable for delay in furnishing of return/details of outward supply as per the provision of Section 47 of the CGST Act. As per the Scheme, the requirement to furnish the return under the proviso to sub-section (1) of Section 39 of the CGST Act is quarterly. Accordingly, a late fee would be applicable for delay in furnishing of the said quarterly return/details of outward supply.

15.1 It is clarified that no late fee is applicable for delay in payment of tax in the first two months of the quarter.

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