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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON QRMP SCHEME EFFECTIVE FROM 01.01.2021 159/2020-21

GST UPDATE ON QRMP SCHEME EFFECTIVE FROM 01.01.2021 159/2020-21
Recently, the government has issued number of notifications and clarification with respect to Quarterly Return Monthly Payment (QRMP) Scheme applicable with effect from 01.01.2021, launched for taxpayers having aggregate turnover of upto Rs. 5 Crores in the preceding financial year which is the subject matter of discussion of our present update. As per this QRMP scheme, the taxpayers having aggregate turnover of upto Rs. 5 Crores in the preceding financial year have the option of filing quarterly GSTR-3B with monthly payment of taxes. The salient features of this scheme along with clarifications issued by the government are discussed in our present update.
 
  1. Eligibility criteria and basic framework of the scheme- The taxpayers need to comply with the following requirements in order to avail the benefit of this scheme:-
  • Aggregate turnover upto Rs. 5 Crores in the preceding financial year. If the aggregate turnover exceeds Rs. 5 Crores during any quarter in the current financial year, the registered person shall not be eligible for scheme from the next quarter.
  • The aggregate turnover is to be checked GSTIN wise and it is possible that certain distinct persons opt for QRMP benefit while others continue to operate under normal return mechanism. The aggregate turnover is not to be considered on “PAN” basis.
  • The registered person must have furnished his last return as on due date of exercising option under this scheme.
  • The facility to avail this scheme will be available throughout the year but option once exercised will apply for the entire financial year unless the aggregate turnover exceeds Rs. 5 Crores.
  • Registered person can opt in for any quarter from first day of second month of preceding quarter to the last day of the first month of the quarter. For eg- If QRMP is to be availed for July to September, the taxpayer can exercise option during 1st May to 31st July. Also, the return for the month of June must have been filed as on date of exercising option.
  • The assessees having aggregate turnover upto Rs. 1.5 Crores who have furnished GSTR-1 on quarterly basis will be migrated to quarterly filing by default. Similarly, registered persons having aggregate turnover more than Rs. 1.5 Crores but upto Rs. 5 Crores in the preceding financial year will be migrated to quarterly filing whereas assessees choosing to file monthly GSTR-1 even when their aggregate turnover is less than Rs. 1.5 Crores will be migrated for monthly filing of returns by default. However, the assessee will have option to change the above default option from 5th December, 2020 to 31st January, 2021.
  • The facility for opting out of scheme will be available from first day of second month of preceding quarter to the last day of the first month of the quarter.

  2. Availability of input tax credit to recipient:- The assessees availing benefit of QRMP will have facility to furnish details of outward supplies through Invoice Furnishing Facility -IFF apart from GSTR-1 for the first two months of the quarter so that the recipient can avail input tax credit without waiting for the quarter to end. This facility to upload invoices will be available from 1st to 13th day of the next month subject to limit of value of invoices upto Rs. 50 Lakhs in each month. This is optional facility available to assessees of QRMP scheme. It is to be noted that invoices furnished using IFF are not to be reported again in GSTR-1.
 
3. Monthly payment of tax facility:-The registered person under the QRMP Scheme would be required to pay the tax due in each of the first two months of the quarter by depositing the due amount in FORM GST PMT-06, by the twenty fifth day of the month succeeding such month. While generating the challan, taxpayers should select “Monthly payment for quarterly taxpayer” as reason for generating the challan. The said person can use any of the following two options provided below for monthly payment of tax during the first two months -
 
  • Fixed sum method:-The assessee can opt for paying an amount equal to 35% of the tax paid in cash in the preceding quarter where the return was furnished quarterly or equal to tax paid in cash in the last month immediately preceding quarter where the return was furnished monthly.
PERIODICITY OF LAST RETURN FILED NATURE OF TAX TAX PAID IN CASH TAX REQURIED TO BE PAID UNDER QRMP
Quarterly IGST 100 100*35%=35
Quarterly CGST 200 200*35%=70
Quarterly SGST 200 200*35%=70
Monthly IGST 100 100
Monthly CGST 50 50
Monthly SGST 50 50
 
 
It is to be noted that no tax is required to be paid under QRMP if there is already sufficient balance in electronic cash ledger or electronic credit ledger on the GST portal. The amount of tax is only to be maintained in the electronic cash or credit ledger and is to be offset while filing the quarterly return. The amount of tax deposited is to be considered as deposit which cannot be used for any other purpose till the filing of return for the respective quarter. However, any amount paid excess can be refunded or utilised subsequently by the taxpayer.
 
  • Self assessment method:- The assessee may also pay tax as per actual supplies made during the first and second month of the quarter under QRMP scheme.
4.Interest liability under fixed sum method:-Registered person paying tax under fixed sum method will not be liable to pay interest if the actual tax payable exceeds the amount of 35% deposited, provided the return for the said quarter is filed by due date. If the return for the quarter is filed after due date, interest would be payable on differential tax from the due date till date of making payment.
 
5. Interest liability under 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 two months of the quarter.
The government had granted option of filing quarterly GSTR-1 to assessees having turnover upto Rs. 1.5 Crores for ease in compliance but it resulted in late reflection of input tax credit in GSTR-2 of the recipient thereby leading to delay in availing input tax credit by the recipient and defeating the purpose with which it was introduced. At the same time, the periodicity of filing GSTR-3B remained monthly as the taxes are being paid through GSTR-3B and giving option of quarterly filing of GSTR-3B would lead to delay in revenue for the government. Hence, the government came up with a mid-way by launching this QRMP scheme allowing filing of GSTR-3B quarterly with monthly payment of taxes so that the interest of assessee and government both is being served. However, in our opinion, introducing the option of paying 35% taxes and furnishing details of outward supplies through IFF instead of GSTR-1 upto Rs. 50 Lakhs in a month would increase the compliance burden of the assessees as keeping track of such provisions would be tedious task as is the task of complying with 20% restriction as provided in Rule 36(4) of CGST Rules, 2017. 

This is solely for educational purpose.

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