Quarterly Return Monthly Payment Scheme (QRMP) under GST

Introduction:

As a measure of easing the process of doing business, GST Council in its 42^nd meeting held on 05.10.2020 recommended that registered person having aggregate turnover up to Rs. 5 crores may be allowed to furnish return on quarterly basis while paying tax on monthly basis. The scheme shall have effect from 01.01.2021. For this purpose, CBIC brought a circular 143/13/2020- GST dated 10^th November, 2020 clarifying various issues relating to QRMP Scheme. In this article, we will have a discussion on the key features of QRMP scheme in the light of notifications & circular issued in this regard.

The following is the list of notifications issued by CBIC in this regard: -

Who is eligible to choose QRMP scheme?

According to Notification No. 84/2020- CT dated 10.11.2020, following is the eligibility criteria to choose 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 Rs. 5 crores in the last financial year, is eligible to choose the QRMP scheme.
• But, in case aggregate turnover exceeds Rs. 5 crores during any quarter in the current financial year, the registered person shall become ineligible for the QRMP scheme from the next quarter.
• A business taking new GST registration or selecting the Composition Scheme can also opt QRMP scheme.
• QRMP scheme is GSTN wise. If an entity has obtained multiple GSTIN on a single PAN, he has option to avail QRMP for one or more GSTIN i.e. he can opt for QRMP for one GSTIN while not opting QRMP for other GSTINs.

When can a taxpayer opt for QRMP scheme?

• Facility to avail QRMP scheme shall be available throughout the year on GST portal.
• A registered person can opt-in for QRMP scheme 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 said quarter.
  For example: - If a taxpayer wishes to opt into scheme for the ‘July to September’ quarter, then he can exercise his option during 1^st May to 31^st July.

• Further it is important to note that in order to exercise the option, the registered person must have furnished the last return, as due on the date of exercising the option.
  For example: - If the taxpayer is exercising the option on 27^th July for the quarter (July-September), in such case, he must have furnished the return for the month of June which was due on 22/24^th July.
• Registered persons are not required to exercise the option every quarter. Once the option is selected, they shall continue under QRMP scheme unless they revise the option.

Changes on the GST portal due to QRMP

The QRMP scheme shall be available w.e.f. 01^st January, 2021. In order to facilitate the taxpayers, for the first quarter i.e. January 2021 to March 2021, the registered persons having an annual aggregate turnover for FY 2019-20 up to Rs. 5 crores shall be auto migrated on the GST portal as below: -

Change in the default option: - Registered persons are free to change the option as above, if they so desire, from 5^th December, 2020 to 31^st January, 2021.

What happens if turnover crosses Rs. 5 crores: - In case the aggregate turnover exceeds Rs. 5 crores during any quarter in the current year, the registered person shall not be eligible for the scheme from the next quarter.

Payment of tax under QRMP scheme

• Registered persons are required to make payment of tax due in each of the first 2 months on monthly basis.
• Payment on monthly basis shall be made by 25^th of the next month.
• Payment of tax shall be made through FORM GST PMT-06 challan.
• While generating challan, the taxpayers should select “Monthly payment for quarterly taxpayer” as reason for generating challan.
• In case the balance in the electronic cash ledger/ electronic credit ledger is adequate for the tax due for the first month of the quarter or cumulatively for first & second month, the registered person is not needed to make any tax deposit.
• No deposit is required for the month, if there is nil tax liability.

Methods of calculating monthly tax under QRMP scheme

There are two options for calculating tax payable on monthly basis for first two months: -
(a) Fixed Sum Method
(b) Self-Assessment Method
The registered person is free to avail either of these methods for tax payments in the first 2 months of quarter.

Fixed Sum Method:

Under this method, a pre-filled challan in FORM GST PMT-06 will be generated on GST portal:
(a) In case of quarterly return filers: - Pre-filled challan amount shall be equal to 35% of tax paid in cash in the preceding quarter
(b) In case of monthly return filers: - Pre-filled challan amount shall be equal to 100% 0f tax paid in cash in last month of the immediately preceding quarter

For example: - In case of quarterly return filers

For example: - In case of monthly return filers

Non-availability of monthly tax payment facility under Fixed Sum Method

If a registered person has not furnished return for a complete tax period preceding such month, he could not make monthly tax payment under “Fixed Sum Method”. 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.

Self – Assessment Method:

• In this method, the registered taxpayer shall himself estimate the tax liability due for the month on basis of his inward and outward supplies and ITC available.
• To help him ascertain ITC available, an auto-drafted ITC statement shall be made available in FORM GSTR-2B for every month.

Refund claim of Monthly tax deposited under QRMP scheme

• Any claim of refund in respect of the amount deposited for the first 2 months of a quarter, for payment of tax, will be permitted only 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.

Quarterly filing of FORM GSTR-3B under QRMP scheme

• Registered persons shall furnish quarterly return in FORM GSTR-3B on or before 22^nd/24^th of the month succeeding the quarter.
• The amount deposited in the first 2 month shall be debited to offset the liability furnished in that quarter’s FORM GSTR-3B.
• Any amount left after filing that quarter’s FORM GSTR-3B may either be claimed as a refund or may be used for any other purpose in subsequent quarters.
• In case, the taxpayer cancels the registration during the first 2 months of the quarter, he is still required to file the return in FORM GSTR-3B for that relevant quarter.

Interest on tax under QRMP scheme

Fixed Sum Method:

• No interest would be payable in case the tax due is paid in the first 2 months of the quarter by way of “Fixed Sum Method” by the due date.
• It means that if while furnishing the return in FORM GSTR-3B, it is found that in any or both the first 2 months of the quarter, the tax liability net of ITC was higher than the amount paid in the challan, then, no interest would be payable provided they deposit system calculated amount for each of the first 2 months and discharge their entire tax liability for the quarter in the FORM GSTR-3B of the quarter by the due date.
• However, if 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 actual payment.

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 2 months of the quarter.
• Interest payable, if any, shall be paid through FORM GSTR-3B.

Applicability of Late Fees under QRMP scheme

• Late fee is applicable for delay in furnishing of the quarterly return/ details of outward supply as per section 47 of the CGST Act.
• No late fees shall be applicable for delay in payment of tax in the first 2 months of the quarter.