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.

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 1^st May to 31^st 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 5^th December, 2020 to 31^st 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 1^st to 13^th 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.

You can reach us at www.capradeepjain.com, at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on twitter at https://www.twitter.com/@capradeepjain21 and u may also follow us on Linkedin https://www.linkedin.com/in/ca-pradeep-jain-b6a31a16

Comments

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

Post a Comment

Query