written by Khatabook | September 23, 2021

GST: Quarterly Return Filing and Monthly Payment of Taxes (QRMP)

The GST Council recommended the Quarterly Return Filing and Monthly Payment of Taxes or QRMP scheme under GST in its 42nd meeting held on 5th October 2020 as a business facilitation measure. This scheme became effective from 1st January 2021. It was introduced to reduce the compliance burdens and promote ease-of-doing-business (EODB). Businesses under this scheme are now allowed to furnish quarterly returns along with a monthly tax payment. If you fall under a specific threshold limit, you will be eligible for the Quarterly Return Filing and Monthly Payment of Taxes or QRMP scheme. Many simplified rules are introduced under this scheme which are discussed in this article.

Eligible registered persons for this scheme:

  • Any registered individual who has crossed the limit of Annual Aggregate Turnover (AATO) in the previous financial year. 
  • Let's say for the year 2019-2020, the limit was Rs. 5 crores. An individual can opt for the QRMP scheme for the January-March quarter, 2021 (up to 31.01.2021), provided that they must file the GSTR-3B for December 2020 (if not filed already)
  • You can calculate the AATO on the common portal only after considering all the taxpayer's details as furnished in his previous year's return. 
  • For cases where the AATO is more than Rs. 5 Crores in a quarter in the present financial year, that individual will be no longer eligible for this scheme from the following quarter onwards.

Exercising the option of QRMP scheme:

You can access the GST portal (http://www.gstcouncil.gov.in/) to avail yourself of the benefits of the QRMP scheme throughout the year, at any time. 

If you are a registered person, you must opt for the scheme within the 1st day of the second month in the previous quarter till the last day of the 1st month of the present quarter, provided that you must file the previous return that was due on the date of opting for the scheme. 

To simplify the statement, here is an example:

If you want to exercise this option for the July to September quarter, you must do so from the 1st May to 31st July.  Whereas, if you choose to exercise the option on 27th July for the given quarter, you must furnish the return for June that was due on 22nd or 24th July (as the case may be).

Also Read: Place of Supply of Goods under GST

Default monthly/ quarterly return to be filed:

Serial no.

Details of registered persons

Default Option

1

 Registered persons having AATO till Rs. 1.5 crore and have furnished GSTR-1 return every quarter in the present financial year  

Quarterly Return

2

Registered persons having AATO till Rs. 1.5 crore and have furnished GSTR-1 return every month in the present financial year

Monthly Return

3

Registered persons having AATO of more than Rs. 1.5 crore to Rs 5 crores in the previous financial year

Quarterly Return

The above default options are for the benefit of registered individuals. However, they are free to change the above option if they want. The opt-out facility of the Scheme for any quarter remains open from the 1st day of the 2nd month of the preceding quarter to the last day of the 1st month of the current quarter. 

You can choose the scheme as per the Goods and Service Tax Identification Number (GSTIN). Therefore, different people (different GSTINs under the same PAN) have the option to avail of the QRMP Scheme for one or multiple GSTINs. Therefore, some GSTINs under the same PAN can opt for this Scheme, and the rest GSTINs may not opt-in for the given Scheme. 

IFF (Invoice furnishing facility) under GST:

IFF is available so that the details of B2B supplies made during the first month is shown in GSTR-2A and GSTR-2B, and the recipients are allowed to avail of the ITC. This facility is only optional and not mandatory. 

Using the IFF, the businesses can upload details of their outward supplies between the 1st to the 13th day of the immediately succeeding month, provided the value should be up to the limit of rupees fifty lakhs each month. They are required to upload only those invoices in the IFF, where they want to consider their customers' ITC implications.

Furnishing of details of outward supplies:

Those who want to opt for the GST QRMP scheme must furnish the details of their outward supplies in the quarterly GSTR-1. For every 1st and 2nd month of a quarter, you must furnish details of your outward supplies using the IFF. However, the said details shall not exceed rupees fifty lakhs per month.

The facility of providing details of invoices in IFF is given to allow furnishing of details of such supplies that are to be reflected in the Form GSTR-2A and form GSTR-2B of the recipient. The facility to furnish IFF for the last month will no longer be available after the 13th of the next month. A facility for continuous uploading invoices is provided as a facilitation measure in businesses. The registered individuals can save their invoices in IFF between the 1st and 13th of the immediately succeeding month.  For simplification, consider the following example:

Example: A registered person (who has opted for the QRMP Scheme) may want to declare two out of their total ten invoices issued in the 1st month of a quarter. They can declare the details of the two invoices using the IFF. The details of the rest of the 8 invoices are to be declared in the GSTR-1 of the relevant quarter. The two invoices declared (in the IFF) are to be shown in the GSTR-2B of the recipient of the 1st month of the quarter. The rest eight invoices declared in the GSTR-1 return are shown in the GSTR-2B of that recipient of the last month in the quarter. This facility would be accessible, say for July, from 1st to 13th August. Similarly, for August, the mentioned facility will be available from 1st to 13th September. 

You are not required to furnish the details again in GSTR-1 if the invoice details are declared using the IFF in the first 2 months in a quarter. So, the details of outward supplies made by any registered individual during any quarter shall consist of invoice details using IFF for each of the 1st two months and the invoice details furnished in GSTR-1 for the relevant quarter. A registered person may, at their option, choose to furnish the details of outward supplies made during a quarter only in the GSTR-1 without using IFF.

Monthly Tax Payment:

Any registered individual under the QRMP Scheme shall pay the amount of tax due in each of the first 2 months in a quarter. However, they must deposit the amount in Form GST PMT-06 by the 25th day of the month immediately succeeding such a month. When generating the challan, taxpayers must choose 'Monthly payment for quarterly taxpayer' as the reason to generate the challan. The said individual can choose any of the two options provided below for the monthly tax payment in the first two months :

  • Fixed Sum - Under this option, you shall have to pay an amount equal to 35% of the tax paid in cash in the previous quarter (if it was a quarterly GST return). Or it can be equal to the amount of tax paid in cash in the last month of the previous quarter (if it was a monthly return). This facility is provided on the common portal to generate a pre-filled challan in the GST PMT-06.

Monthly payment of taxes through this method will not be available to those registered persons who failed to furnish the return for a complete tax period preceding the relevant month. Note that a complete tax period is when the person is registered from the 1st day till the last day of the tax period.  

  • Self-Assessment - The said registered individuals can pay the tax amount due after considering the tax liability on outward and inward supplies and the availability of ITC in GST PMT-06. To avail of the ITC, an auto-drafted ITC statement is furnished in GSTR-2B every month.

Any registered person is free to opt for either of the two tax payment methods mentioned above in any of the two months of any quarter.: 

  • For nil tax liability or for the first month of the quarter - No need to deposit any amount even if there is an adequate amount in the e-cash/ e-credit ledger.
  •  For nil tax liability or the second month of the quarter - No need to deposit any amount even if there is an adequate amount in the e-cash/ e-credit ledger. 

Any claim to refund the amount deposited for the first two months of a quarter for the tax payment shall be permitted only after the return in FORM GSTR-3B for the said quarter has been furnished. The taxpayer cannot use the deposit amount for any other purpose until the quarter's return filing.

Quarterly filing of GSTR-3B:

Furnish the GSTR-3B quarterly on or before the 24th of the month following such a quarter. In GSTR-3B, you must furnish the supplies made in the quarter, availed ITC and all other required details. The deposited amount by the registered individual in the first 2 months can be used only to offset the liability in that quarter’s GSTR-3B. However, if any amount is left after filing that quarter’s GSTR-3B, it can either be used for other purposes in the subsequent quarters or can be claimed as a refund. When there is a cancellation of registration of such a person during any of the first two months of the quarter, they still need to furnish a GSTR-3B return for the relevant tax period. 

Interest applicability in different cases:

The interest shall be liable on the following basis:

Fixed Sum Method:

Serial no.

Cases

Interest to be paid

1

Tax liability in the pre-filled GST PMT-06 form paid by the 25th of the next month.

Nil

2

Tax liability in the pre-filled GST PMT-06 not paid by the 25th of the next month

18% of the tax liability (from 26th of the following month till the date of payment)

3

The final tax liability for the first two months is less than or equal to the tax paid through the pre-filled GST PMT-06.

Nil

4

The final tax liability for the first two months is higher than the tax paid through pre-filled GST PMT-06, and the excess liability has been paid within the GSTR-3B due date.

Nil

5

The final tax liability for the first two months is higher than the tax paid through pre-filled form GST PMT-06, and excess tax liability has not been paid within the GSTR-3B due date

18% of the tax liability (from GSTR-3B due date* till the payment date)

[*22nd or 24th of the month following such quarters based on the taxpayer's state.]  

Self Assessment Method:

The taxpayer has to pay interest at 18% on the final tax liability unpaid or paid after the due date for the first two months of the quarter.

Note that the taxpayer has to pay interest at 18% if there is any late tax payment in the third month of a quarter. This is applicable irrespective of the type of method used.

Late Fee under the QRMP scheme:

If you did not pay the tax due until the last GST payment date, you would have to pay a late fee for it. It should be paid as per the given table if the GSTR-3B (quarterly) is not filed within the due date, subject to a maximum late fee of Rs. 5000:

Act Name

Late fee for every day of delay 

Late fee for every day of delay (for ‘Nil’ tax liability) 

CGST Act, 2017

Rs.25

Rs.10

SGST Act, 2017

Rs.25

Rs.10

IGST Act, 2017

Rs.50

Rs.20

However, you do not have to pay a late fee for the delay in tax payment during the first two months in the quarter in form GST PMT-06.

Also Read: Filing Nil GSTR 1 Return on GST Portal

Conclusion:

You can avail of the GST QRMP scheme by following the above set of rules. This will benefit your business to grow more. We hope that we have been able to clear your doubts regarding the QRMP scheme and GST quarterly return through this article, among other information. Adhering to GST compliances is essential, and this is where the Khatabook app comes into the picture. With this app, you can learn more about GST, manage your business and personal ledgers on your phone. 

FAQ

1. From where can I opt-in or opt-out from the QRMP scheme?

You will have to log in to the GST portal using your valid credentials and then navigate to Services > Returns > Opt-in for Quarterly Return option to opt-in or opt-out of the QRMP scheme. 

2. Can a GST practitioner opt-in or opt-out of the QRMP scheme on behalf of the taxpayer?

No, they cannot do so. They can only view details.

3. If a taxpayer has opted for the QRMP scheme and their Annual Aggregate Turnover (AATO) exceeds Rs 5 Crores, will the scheme be valid?

No, in case the Annual Aggregate Turnover (AATO) of a taxpayer exceeds ₹ 5 Crores, the taxpayer will not be eligible for the QRMP scheme.

4. Is it required to exercise the option every quarter/year?

No, registered individuals are not required to exercise the option every quarter. If the option is exercised, they will continue to furnish returns as per the option selected for future tax periods unless they change the option or their AATO is more than rupees five crores.

5. What are the benefits of the QRMP scheme?

For the ease of taxpayers, the system has assigned the frequency of GST quarterly return to small taxpayers.

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