Quarterly Return Monthly Payment Scheme is also known as QRMP, recently introduced initiative by the Government in its initiative to simplify compliance for taxpayers. The CBDT (Central Board of Direct Taxes) had issued notifications which are: Notification No. 82/2020, Notification No. 83/2020, Notification No. 84/2020 & Notification No. 85/2020 Central Tax dated 10-11-2020 and Circular 143/2020 on 10th November, whereby the registered persons having aggregate turnover up to INR 5 crores to be allowed to furnish their GST returns on a quarterly basis along with monthly payment of tax under QRMP Scheme, with effect from January 01, 2021, that is from last quarter of FY 2020-21.
The CBIC aka Central Board of Indirect Taxes and Customs had notified about the scheme- QRMP. The CBIC has stated about the eligibility for QRMP Scheme that a registered person who is required to file a return in Form GSTR-3B, and the person who are having aggregate turnover of up to INR 5 crores in the preceding FY.
Now let us Understanding the New Quarterly Return Monthly Payment (QRMP) Scheme in details
The Goods & Service Tax (GST), inspite of its PAN India roll-out as ‘One Nation One Tax’, with effect from 1 July 2017, has been looked upon with some reservations and apprehensions by the SME and traders on account of its perceived complicated compliances including the requirement of monthly return filings.
In present, the businesses and traders having an annual aggregate turnover in excess of INR 1.5 crores are needed to file monthly GSTR 1 (Return for Outward Supplies) and GSTR 3B (Consolidated Return of Outward & Inward Supplies).
What is the Eligibility to QRMP Scheme?
The taxpayer who are having aggregate turnover up to INR 5 Crores in preceding FY (from FY 20-21) may opt to furnish GST returns on a Quarterly basis with a monthly payment of tax with effect from 1st Jan, 2021 under Quarterly Returns and Monthly Payment Scheme (QRMP).
In case aggregate turnover INR 5 Crores during the current financial year, the taxpayer will not be eligible for furnishing of GST returns on monthly basis, from the first month of the quarter succeeding the quarter during which his aggregate turnover exceeds INR 5 Crores
When the turnover exceeds INR 5 Crores in Oct ‘21 i.e FY 21-22, the taxpayer shall not be eligible to opt for quarterly filing from Oct ‘21 onwards
When can You Avail the QRMP scheme?
Option to file GSTR 3B on a quarterly basis can be done any time during the year from the 1st day of the 2nd month of the preceding quarter till the last day of the 1st month of the quarter for which the option is being exercised.
What is the Validity of scheme?
The taxpayer continues to come under the QRMP scheme once she/he has opted for the same. The scheme will be valid for all future periods unless the taxpayer becomes ineligible or voluntarily opts out of the QRMP scheme.
What is IFF (Invoice Furnishing Facility) under Quarterly Return Monthly Payment Scheme?
In the existing framework i.e. pre-QRMP regime also, the registered persons having an aggregate annual turnover of upto INR 5 Crores have been given an option of filing their quarterly GSTR-1 & GSTR 3B Returns. However, on practical considerations, this kind of registered person are not able to avail this benefit of quarterly return filing, because of the non-reflection of the corresponding ITC in GSTR 2A/ GSTR 2B of their respective recipients of goods or services.
For every 1st and 2nd months of a quarter, such registered person will have the facility called Invoice Furnishing Facility aka IFF to furnish the details of such outward supplies to a registered person, as he/she may consider essential, between the 1st day of the succeeding month till the 13th day of the succeeding month. The said details of outward supplies shall, but, not exceed the value of INR 50 Lacs in each month.
You can note that after 13th of the month, this facility for furnishing IFF for previous month would not be available. As a facilitation measure, continuous upload of invoices would also be endowed for the registered persons wherein they can save the invoices in IFF from the 1st day of the month till 13th day of the preceding 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.
How and in what process the Monthly Taxes Payment is to be made under QRMP Scheme?
The person who is registered under the QRMP Scheme would be required to pay the tax due in each of the first 2 months of the quarter by depositing the due amount in FORM GST PMT-06, by the 25th day of the succeeding month. While generating the challan, taxpayers should select “Monthly payment for quarterly taxpayer” as reason for generating the challan. The said person can use these 2 options provided below for monthly tax payment during the first two months –
(a) Fixed Sum Method: A facility is being made available on the portal for generating a pre-filled challan in FORM GST PMT-06 for an amount equal to 35% of the tax paid in cash in the preceding quarter where the return was done quarterly; or equal to the tax paid in cash in the last month of the immediately preceding quarter where the return was done monthly.
(b) Self-Assessment Method: The Registered Persons can also pay the due tax through considering the tax liability on inward & outward supplies and the ITC (input tax credit) available, in FORM GST PMT-06. 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.
In case the balance in the electronic cash ledger or electronic credit ledger is appropriate for the tax due for the 1st month of the quarter or where there is zero tax liability, the registered person may not deposit any amount for the said month. Similarly, for the 2nd month of the quarter, in case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the cumulative tax due for the 1st and the 2nd month of the quarter or where tax liability is nil, the registered person may not deposit any amount.
What is the Criterion for Determining the Threshold Annual Turnover Limit- PAN or GSTIN?
The option to avail the QRMP Scheme is GSTIN wise and thus, distinct persons as defined in CGST Act- section 25 have the option to avail the QRMP Scheme for one or more GSTINs.