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QRMP Scheme – Analysis and Implications

To reduce the burden of filing monthly GST returns, the Central Board of Indirect Taxes and Customs (CBIC) has introduced the Quarterly Return Monthly Payment (QRMP) Scheme (Circular CBEC-20/01/08/2020-GST dated 10 November 2020).

To help you understand this scheme’s intricacies and clear your doubts, we will be going LIVE on 20 January 2021 at 6:00 PM with CA Shaifaly Girdharwal. Limited seats are available. Block yours right away!

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QRMP Scheme

In this article, we will discuss the key features and analyse the QRMP scheme:

Who Can Opt For The QRMP Scheme?

A registered taxpayer who is required to file Form GSTR-3B monthly and has a turnover less than INR 5 crores, during the previous financial year, is eligible to apply for the QRMP scheme. This scheme is applicable from 1 January 2021.

Note: In case the turnover of the taxpayer exceeds INR 5 crores during any quarter of the financial year, then, the taxpayer will not be eligible to opt for the scheme from the next quarter.

How And When Can Taxpayers Opt For The QRMP Scheme?

  • An eligible taxpayer can opt for the QRMP scheme on the GST common portal. The taxpayer 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 said quarter. It is important to note that the taxpayer should have filed the previous eligible return within the due date at the time of opting in for the QRMP scheme.

For example, if a taxpayer wishes to opt into the scheme for the ‘October-December’ quarter, then he/she should opt-in between 01 August and 31 October. If the taxpayer is opting for the option on 27 August, then, the returns for July should have been filed on time (due on 22/24 of August).

Note: Once the taxpayer has opted for this scheme, the scheme will be applicable until the taxpayer opts-out or becomes ineligible.

  • In the first quarter of this scheme, i.e., January-March 2021, the GST portal will automatically migrate all eligible taxpayers on to this scheme provided that the taxpayers have filed the returns for October 2020 by 30 November 2020. The migrations will be done with the following default options based on the anticipated behaviour of the taxpayers:
Class Of Registered Taxpayer Default Option
A registered person having an aggregate turnover of up to INR 1.5 crores (who have furnished Form GSTR-1 quarterly in the current financial year) Quarterly Return
A registered person having an aggregate turnover of up to INR 1.5 crores (who have furnished Form GSTR-1 on a monthly basis in the current financial year) Monthly Return
A registered person having an aggregate turnover of more than INR 1.5 crores and up to INR 5 crores in the preceding financial year Quarterly Return

Note: The GSTN has enabled the ‘Opt-in for Quarterly Return’ option.

If the taxpayers wish to opt-out of the scheme, they can do so between 05 December 2020 and 31 January 2021.

  • Taxpayers who have opted for the Composition Scheme can also opt-in for the QRMP scheme.
  • The scheme is available for individual GSTINs. In case there are multiple GSTINs for a single PAN, then the taxpayers have an option to opt-in for selected GSTINs and opt-out for the remaining GSTINs.
  • The taxpayers also have the option to use the Invoice Furnishing Facility (IFF) for the first and second months of the quarter, wherein, the registered person can furnish the details of the outward supplies (not exceeding the value of INR 50 lakhs in each month), between 1st and 13th day of the succeeding month. E.g., the taxpayer, who has availed the scheme, has an option to declare 1 out of 5 invoices issued in the first month of the quarter, as the customer (of that 1 particular invoice) desires to avail ITC in the first month itself. The details of this 1 invoice can be furnished using the IFF. The remaining 4 invoices can be furnished in Form GSTR-1 of the said quarter. This way the 1 invoice furnished using the IFF will appear in the GSTR-2B of the said customer in the first month, and the remaining 4 invoices will appear in the GSTR-2B of the respective customers in the last month of the quarter.

How Will Tax Payments Be Made Under The QRMP Scheme?

A taxpayer under the QRMP scheme has to pay the tax due for the first two months of the quarter by depositing the amounts in Form GST PMT-06 by the 25th of the following month. In the challan, taxpayers should select ‘Monthly Payment for Quarterly Taxpayer’ as the reason for generating the challan. The taxpayer can use any of the following two options to calculate and remit the tax amounts for the first two months of the quarter:

1. Fixed Sum Method:

Under this method, a pre-filled challan will be generated on the GST portal for the taxpayer. The amount in this challan will be equivalent to 35% of the tax paid in cash during the previous quarter for quarterly filers or an amount equal to the tax paid in cash during the previous month for monthly filers.

Illustration:

Quarterly filers

Tax paid in cash in Previous Quarter (January- March) INR 35% of Tax required to be paid in each of the months of the current quarter (April and May) INR
CGST 200 CGST 70
SGST 200 SGST 70
IGST 1,000 IGST 350
Cess 100 Cess 35

Monthly filers

Tax paid in Cash in March

INR

Tax required to be paid in April

INR

CGST 100 CGST 100
SGST 100 SGST 100
IGST 200 IGST 200
Cess 50 Cess 50

2. Self-Assessment Method:

The taxpayer can pay the tax due by taking into consideration the tax liability on inward and outward supplies and the input tax credit available in Form GST PMT-06. An auto-drafted input tax credit statement will be available in Form GSTR-2B for every month to assist the taxpayers.

It has been clarified that:

  • In case the balance in the electronic cash ledger and/or electronic credit ledger is sufficient for the tax due for the first month of the quarter or
  • When there is a nil tax liability,

the registered person need not deposit any amount for that month.

Similarly, for the second month of the quarter,

  • In case the balance in the electronic cash ledger and/or electronic credit ledger is sufficient for the cumulative tax due for the first and the second month of the quarter or
  • When there is a nil tax liability,

the registered person need not deposit any amount.

Any claim of refund in respect of the amount deposited for the first two months of a quarter, for payment of tax, will be allowed only after the return in Form GSTR-3B for that quarter has been filed.

What Are The Due Dates For Filing Quarterly Returns Under The QRMP Scheme?

Taxpayers who have opted for the QRMP scheme need to file their Form GSTR-3B by the 22/24th of the month following the end of the quarter. The taxpayers should compute the tax due/refundable for the quarter after adjusting the tax paid in the first two months of the quarter. Any tax refundable can be claimed as a refund after the return is filed or it can also be used to pay taxes in the subsequent quarters.

In case the taxpayer cancels the registration during the first two months of the quarter, then the taxpayer is required to file the return for the period up to the cancellation, in the relevant quarter.

Interest On Tax

Fixed Sum Method:

If the taxpayer has paid an amount lesser than the tax liability (net of available credit) in the first two months of the quarter, then no interest will be charged provided that:

  • The taxpayer deposits the system calculated amount for each of the two months, and,
  • He/She has discharged the entire tax liability for the quarter in the Form GSTR-3B by the due date, i.e., by 22/24th of the month following the end of the quarter.

Self-Assessment Method:

Interest will be charged as per Section 50 of the CGST Act on the tax or any other part thereof (net of available credit), which, remains unpaid or is paid beyond the due date for the first and second months of the quarter.

Note: Interest should be paid through Form GSTR-3B.

A late fee will be applicable as per Section 47 of the CGST Act for the delay in furnishing of the said quarterly return/details of outward supply under the scheme. However, there is no late fee applicable for delay in payment of taxes during the first two months of the quarter.

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