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

 

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

 

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.

Latest Updates on QRMP scheme

28th May 2021
At the 43rd GST Council meeting, the following was announced:
(1) The time limit to furnish B2B supplies on the IFF (optional facility for the taxpayers opting into the QRMP scheme), for May 2021 has been extended from 13th June to 28th June 2021.
(2) For any delayed submission of PMT-06 for April 2021 and May 2021, interest relief has been provided as follows:
(i) For April 2021, No interest is charged for delayed submission up to 9th June, whereas 9% of reduced interest is charged between 10th June and 9th July, and 18% of interest is charged thereafter.
(ii) For May 2021, No interest is charged for delayed submission up to 10th July, whereas 9% of reduced interest is charged between 11th and 25th July, and 18% of interest is charged thereafter.
(3) Quarterly GSTR-3B filing for Jan-Mar 2021 has also got interest and late fee relief as laid down here.

1st May 2021
The time limit to furnish B2B supplies on the IFF (optional facility for the taxpayers opting into the QRMP scheme), for April 2021 has been extended from 13th May to 28th May 2021.

6th January 2021
IFF is LIVE on GST portal. Sorting out the B2B documents for IFF reporting becomes essential to pass tax credits to buyers but may get cumbersome. The GSTN’s advisory stated that the option to upload details in IFF can be used till 13th of the next month. Any invoices left out to be reported can be filed using the IFF in the consequent month IFF or directly on the quarterly Form GSTR-1.

Navigate to Returns > Services > Returns Dashboard > File Returns > Select FY and month > click on the ‘SEARCH’ button to file the IFF forms.

December 2020
The last date to opt in or out of the QRMP scheme for small GST taxpayers is 31st January 2021 for the quarter of Jan-Mar 2021.

 

Who is eligible for the QRMP scheme?

A registered person who is required to furnish a return in GSTR-3B, and who has an aggregate turnover of up to Rs.5 crore in the preceding financial year, is eligible for the QRMP Scheme. Further, in case the aggregate turnover exceeds Rs.5 crore 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 was made available from 1st January 2021 onwards. It is clarified that this scheme is optional and can be availed based on GSTIN.

How to exercise Option for QRMP Scheme?

A registered person who intends to file his GSTR-3B quarterly should indicate the same on the 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 Apr-Jun 2021, he should have opted for quarterly filing on the common GST portal between 1st February 2021 and 30th April 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:

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). In such a case, the taxpayer must furnish GSTR-3B on a monthly basis.

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.

Deemed monthly/quarterly filing of GSTR-3B

The taxpayer has to follow the above procedure to opt for the quarterly GSTR-3B. However, in 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 could have changed the default option and opt for quarterly GSTR-3B filing between 5th December 2020 and 31st January 2021.

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. 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 1st January 2021.

 

How to make monthly tax payments under the QRMP scheme?

The taxpayer has to deposit tax using form 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), also popular as 35% challan method, or use the Assessment Method (SAM).

Fixed Sum Method (FSM) or 35% challan method:

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 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–

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.

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.

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

Input Tax Credit Claims under QRMP Scheme

There is no procedural difference in the way Input Tax Credit (ITC) is claimed by a registered person opting into the QRMP scheme. The QRMP taxpayers who are using the self-assessment method of calculating the tax payments for the first two months of the quarter can consider the ITC available as per their GSTR-2B for the month. Accordingly, they can pay the balance as cash towards the GST liability.

However, the GSTR-2B for the quarter gets generated on 14th of the month following the quarter upon the filing of quarterly GSTR-1. Hence, the buyers who deal with the vendors under the QRMP scheme will need to refer to quarterly GSTR-2B for ITC claims.

Interest under QRMP scheme

The interest will be applicable as follows if the taxpayer opts for one of the following methods:

Fixed Sum Method (FSM) or popularly known as the 35% challan method:

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 quarters 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 at 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 at18% if there is any late payment of tax in the third month of a quarter. This is applicable irrespective of Fixed Sum Method (FSM), popular as 35% challan method, or Self Assessment Method (SAM).

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 everyday of delay	Late fee for everyday 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 PMT-06.

Issues or Challenges under QRMP 

Whether to opt into QRMP or to continue with monthly returns must be decided for each of the GSTINs of a business (PAN), which can be tedious and time consuming. The segregation of the documents as B2B and non-B2B must also be done where the taxpayer opting into the scheme uses the Invoice Furnishing Facility (IFF). 

It would help in moving the B2B documents to IFF and rest directly to the quarterly GSTR-1 return. Moreover, the reconciliation between IFF, sales register and GSTR-1 becomes more essential. Further, the taxpayer under QRMP scheme must choose between two methods for tax payment every month, i.e. Fixed Sum/35% challan Method and Self-assessment Method.