Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme under GST

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The Central Board of Indirect Taxes & Customs (CBIC) introduced Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme under Goods and Services Tax (GST) to help small taxpayers whose turnover is less than Rs.5 crores. The QRMP scheme allows the taxpayers to file GSTR-3B on a quarterly basis and pay tax every month.

1. Who is eligible for the QRMP 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. Further, in case the aggregate turnover exceeds 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.

It is clarified that 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.

The quarterly GSTR-3B filing option will be available from 1st January 2021 onwards. It is clarified that this scheme is optional and can be availed based on GSTIN.

2. How to exercise Option for QRMP Scheme?

A registered person who intends to file his GSTR-3B quarterly should indicate the same on GST portal, from the 1st of the second month of the preceding quarter until the last day of the first month of the quarter for which such option is being exercised.

For example: If A wishes to file quarterly returns for the quarter of Jan-Mar 2021, he should opt for quarterly filing on the common GST portal between 1st November 2020 and 31st January 2021.

Once the registered person has opted for quarterly filing, he will have to continue to furnish his return every quarter for all future tax periods, except in the following situations:

  1. If the taxpayer becomes ineligible for furnishing a quarterly return (for example, if the aggregate turnover crosses Rs.5 crore during a quarter, then from the next quarter he will not be able to file quarterly returns).
    If the taxpayer opts to furnish GSTR-3B on a monthly basis.
  2. A registered person will not be eligible to opt for furnishing quarterly returns if the last return, which was due on the date of exercising such an option has not been furnished.

For example: If the person is opting for quarterly GSTR-3B filing on 1st December 2020, he will need to furnish his GSTR-3B return for October 2020, which would have been the last return due on the date of exercising the quarterly filing option.

3. Deemed monthly/quarterly filing of GSTR-3B

The taxpayer has to follow the above procedure to opt for the quarterly GSTR-3B. However, the GSTN case of registered persons falling in the categories specified in the table below, who have furnished their GSTR-3B return for October 2020 by 30th November 2020, it shall be deemed that they have opted for monthly or quarterly filing as detailed below-

 

S No.

Class of Registered Persons

Deemed Option

1

Registered individuals with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 quarterly in the current financial year

Quarterly GSTR-3B

2

Registered persons with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 monthly in the current financial year

Monthly GSTR-3B

3

Registered persons having an aggregate turnover exceeding Rs.1.5 crore and up to Rs.5 crore in the preceding financial year 

Quarterly GSTR-3B

The taxpayers referred to in the Sl. No. 2 in the above table can change the default option and opt for quarterly GSTR-3B filing between 5th December 2020 and 31st January 2021.

4. How to submit details of outward supplies?

The taxpayers who opted for the QRMP scheme can use the Invoice Furnishing Facility (IFF) which allows quarterly GSTR-1 filers to upload their invoices every month. However, the IFF can be used only when a taxpayer whose turnover is up to Rs.1.5 crore. One should keep the following points in mind before utilising the IFF:

  • The IFF can be utilised only for the first two months of a quarter.
  • The invoices relating to the last month of a quarter are to be uploaded in the GSTR-1 return only.
  • There is no requirement to upload invoices in GSTR-1 if the same has been uploaded in the IFF.
  • The taxpayer has to submit the B2B invoice details of sale transactions (both inter-state and intra-state) along with debit and credit notes of the B2B invoices issued during the month.
  • The total net value of invoices that can be uploaded is restricted to Rs.50 lakh per month.
  • The details submitted in IFF will be reflected in the GSTR-2A, GSTR-2B, GSTR-4A or GSTR-6A of the recipients as the case may be.
  • The Invoice Furnishing Facility will come into effect from 01.01.2021.
  • invoice-furnishing-facility(IFF)

    Note: There might be a situation where a taxpayer aggregate turnover is more than 1.5 crore but below Rs. 5 crore and those taxpayers can not avail IFF utility to report their outward supplies. In such cases, they can opt for the QRMP scheme, but they have to submit their outward supplies in GSTR-1 on a monthly basis.

    5. How to make monthly tax payments under the QRMP scheme?

    The taxpayer has to deposit tax using form GST PMT-06 by the 25th of the following month, for the first and second months of the quarter. The taxpayers can pay their monthly tax liability either in the Fixed Sum Method (FSM) or Self Assessment Method (SAM).

    Fixed Sum Method (FSM):

    The taxpayer must pay an amount of tax mentioned in a pre-filled challan in the form GST PMT-06 for an amount equal to 35% of the tax paid in cash.

     

    S No

    Type of Taxpayer

    Tax to be paid

    1

    Who furnished GSTR-3B quarterly for the last quarter

    35% of tax paid in cash in the preceding quarter

    2

    Who furnished GSTR-3B monthly during the last quarter

    100% of tax paid in cash in the last month of the immediately preceding quarter

    Example for understanding FSM:

    Scenario 1: If GSTR-3B for January 2021 to March 2021 was filed on a quarterly basis

     

    Tax paid in cash during Jan’21 – Mar’21 quarter

     

    Tax required to be paid in each of Apr’21 and May’21

    CGST

    10,000

     

    CGST

    3,500

    SGST

    10,000

     

    SGST

    3,500

    IGST

    20,000

     

    IGST

    7,000

    Cess

    3,000

     

    Cess

    1,050

    Scenario 2: If GSTR-3 was filed on a monthly basis during the quarter of January 2021 to March 2021

     

    Tax paid in cash during Mar’21

     

    Tax required to be paid in each of Apr’21 and May’21

    CGST

    3,000

     

    CGST

    3,000

    SGST

    3,000

     

    SGST

    3,000

    IGST

    5,000

     

    IGST

    5,000

    Cess

    1,000

     

    Cess

    1,000

    Self Assessment Method (SAM):

    This is the existing method where a taxpayer can pay the tax liability by considering the tax liability on inward and outward supplies and the input tax credit available. The taxpayer has to manually arrive at the tax liability for the month and has to pay the same in form GST PMT-06. For ascertaining the amount of ITC available for the month the taxpayer can use form GSTR-2B.

    There are certain instances where no amount may be required to be deposited, such as –

    1. For the first month of the quarter – where the balance in the electronic cash/credit ledger is adequate for the tax liability of the said month OR where the tax liability is nil.
    2. For the second month of the quarter – where the balance in the electronic cash/credit ledger is adequate for the cumulative tax liability for the first and second months of the quarter OR where the tax liability is nil.

    It is to be noted that a registered person will not be eligible for the said procedures unless he has furnished the return for the complete tax period preceding such month. A complete tax period is a tax period where the said person is registered from the first until the last day of the tax period.

    6. Due dates for filing quarterly GSTR-3B

    The due dates filing quarterly GSTR-3B has been notified as follows:

     

    S No

    GST Registration in States and Union Territories

    Due Date

    1

    Chhattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli, Daman and Diu, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh

    22nd of the month succeeding such quarter

    2

    Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Mizoram, Manipur, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha

    24th of the month succeeding such quarter

    7. Interest under QRMP scheme

    The interest will be applicable as follows if the taxpayer opts for Fixed Sum Method (FSM):

     

    S No

    Scenario

    Interest to be paid

    1

    Tax liability mentioned in pre-filled form GST PMT-06 is paid by 25th of the following month

    Nil

    2

    Tax liability mentioned in pre-filled form GST PMT-06 is not paid by 25th of the following month

    18% of the tax liability

    (from 26th of the following month till the date of payment)

    3

    The final tax liability for the first two months is less than or equal to the amount paid through pre-filled form GST PMT-06

    Nil

    4

    The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has been paid within quarterly GSTR-3B due date

    Nil

    5

    The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has not been paid within quarterly GSTR-3B due date

    18% of the tax liability

    (from GSTR-3B due date* till the date of payment)

    *22nd or 24th of the month succeeding such quarter based on the state of the taxpayer.

    The interest will be applicable as follows if the taxpayer opts for Self Assessment Method (SAM):

    The taxpayer has to pay interest @ 18% on the net tax liability which remains unpaid or paid beyond the due date for the first two months of the quarter.

    It is important to note that the taxpayer has to pay interest @18% if there is any late payment of tax in the third month of a quarter. This is applicable irrespective of Fixed Sum Method (FSM) or Self Assessment Method (SAM).

    8. Late fee under QRMP scheme

    The late fee should be paid as follows if the quarterly GSTR-3B is not filed within due date, subject to a maximum late fees of Rs 5,000:

     

    Name of the Act

    Late fee for every

    day of delay

    Late fee for every

    day of delay

    (in case of ‘Nil’

    tax liability)

    CGST Act

    Rs.25

    Rs.10

    SGST Act

    Rs.25

    Rs.10

    IGST Act

    Rs.50

    Rs.20

    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.

    e-Invoicing is India’s biggest tax reform next to GST, which will soon encompass every business. Stay ahead of the curve! Read our article to get an overview of e-Invoicing System.




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