GST Big Update- Quarterly Return and Monthly Payment Scheme Launched by CBIC

In Order to further ease the process of doing business and the Industry Demands for lesser compliance under GST, the government has now introduced a new scheme under GST, popularly known as QRMP Scheme i.e Quarterly Return and Monthly Payment Scheme. Under this post, we will understand the concept of the QRMP scheme.

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Quarterly Return and Monthly Payment Scheme

As a trade facilitation measure and in order to further ease the process of doing business, the GST Council in its 42nd meeting held on 05.10.2020, had recommended that registered person having aggregate turnover up to five (5) crore rupees may be allowed to furnish return on a quarterly basis along with monthly payment of tax, with effect from 01.01.2021. Here is the step by step guide for Quarterly Return and Monthly Payment Scheme.

What is the “Quarterly Return and Monthly Payment Scheme”?

The quarterly Return and Monthly Payment scheme are for small taxpayers to file their Form GSTR 1 and Form GSTR 3B returns on a quarterly basis while payment of tax needs to made on monthly basis.

Who are eligible for the “Quarterly Return and Monthly Payment Scheme”?

A registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of up to 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme.

It is clarified that the aggregate annual turnover for the preceding financial year shall be calculated in the common portal taking into account the details furnished in the returns by the taxpayer for the tax periods in the preceding financial year.

Also Read- GSTR 1 Return- A Simple guide to GSTR 1

When the registered person in the scheme become ineligible from the “Quarterly Return and Monthly Payment Scheme”?

In case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter and become ineligible.

When can a registered person opt for the QRMP scheme?

Exercising option for QRMP Scheme- Facility to avail the Scheme on the common portal would be available throughout the year.

A registered person 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 quarter. In order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such an option.

For example- A registered person intending to avail of the Scheme for the quarter ‘July to September’ can exercise his option from 1st of May to 31st of July. If he is exercising his option on 27th July for the quarter (July to September), in such case, he must have furnished the return for the month of June which was due on 22/24th July.

The below chart will clarify the answer-

QuarterBetween
Q1- April, May, June1st Feb to 30th April
Q2- July, Aug, Sep1st May to 31st July
Q3- Oct, Nov, Dec1st August to 31st October
Q4- Jan, Feb, March1st November to 31st January
Quarterly Return and Monthly Payment Scheme opt-in Option

How can taxpayers do opt-in (avail) of the scheme?

Taxpayers need to follow the below navigation-

Login -> Services -> Returns -> Opt-in for quarterly return.

Do I need to exercise the option of the Quarterly Return and Monthly Payment Scheme every quarter?

Registered persons are not required to exercise the option every quarter. Where such option has been exercised once, they shall continue to furnish the return as per the selected option for future tax periods, unless they revise the said option.

Also Read- GSTR 3B Return- A Simple guide to GSTR 3B

How and when I can opt this in the first quarter of Scheme?

For the first quarter of the Quarterly Return and Monthly Payment Scheme i.e. for the quarter January 2021 to March 2021, in order to facilitate the taxpayers, it has been decided that all the registered persons, whose aggregate turnover for the FY 2019-20 are up to 5 crore rupees and who have furnished the return in FORM GSTR-3B for the month of October 2020 by 30th November 2020, shall be migrated on the common portal.

Therefore, taxpayers are advised to furnish the return of October 2020 in time so as to be eligible for default migration. The taxpayers who have not filed their return for October 2020 on or before 30th November 2020 will not be migrated to the Scheme. They will be able to opt for the Scheme once the FORM GSTR-3B as due on the date of exercising option has been filed.

The default option has been provided for the convenience of registered persons based on their anticipated behaviour. However, such registered persons are free to change the option as above, if they so desire, from 5th of December, 2020 to 31st of January, 2021. It is re-iterated that any taxpayer whose aggregate turnover has exceeded 5 crore rupees in the financial year 2020-21, shall opt out of the Scheme.

What is the meaning of the “default option” in the QRMP scheme?

If your aggregate turnover for FY 2019-20 is upto Rs. 5 crore and you have filed your Form GSTR 3B for the month of October 2020 by 30th November 2020, you may be defaulted to make the scheme by the system. If you wish to remain in the scheme, then you may not need to take any action and file you return by the due date in April 2021. However, if you wish to exit the scheme you may do so by 31st January 2021.

Must Read: GSTR 9 and 9C- Things you need to know before filing

From when the “Quarterly Return and Monthly Payment Scheme” is available to opt-in?

The Quarterly Return and Monthly Payment Scheme will be available from 1st January 2020 onwards, however, you may opt-in anytime after 5th December 2020.

When can I choose to opt-out of the “QRMP” scheme?

If you wish to opt-out,” the facility will be available from the first day of the second month of the preceding quarter to the last day of the first month of the quarter.

In the current financial year, the aggregate turnover crosses the limit of Rs. 5 Crore (in any quarter of the current FY), do I need to do anything?

In case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter.

Challan and tax Payment under “Quarterly Return and Monthly Payment Scheme” (M1 and M2)

The registered person under the QRMP Scheme would be required to pay the tax due in each of the first two months (M1 and M2)of the quarter by depositing the due amount in FORM GST PMT-06, by the 25th of the month succeeding such month.

Note- Here M1 refers to the first month of the quarter and M2 refers to the 2nd month of the quarter.

While generating the challan, taxpayers should select “Monthly payment for the quarterly taxpayer” as the 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-

Method for payment of challan under QRMP Scheme

A) Fixed payment method of tax payment under QRMP

You have to generate a payment challan for the first two months of the quarter, where you have an option to pay according to the “Fixed Payment Method”. Under this method, you have to pay 35% of the cash liability paid in the form GSTR 3B for the last quarter (in case GSTR3B was filed quarterly) or 100% of the cash liability paid in the form GSTR 3B for the last month (In the case where form GSTR 3B was filed monthly).

This will be an auto calculated system generated challan and no calculation/have to be done by the assessee.

Note- There is no interest payment to be made by the taxpayer if he chooses the “fixed payment method” for the first two months of the quarter and pays tax accordingly.

B) Self Assessment Tax Payment Method

Under this method, you have to assess your liability for a month by ascertaining outward supplies made during the month and your available Input Tax Credit.

Also Read: Know the Difference between GSTR 1 and GSTR 3B

Challan payment methods are optional or have some choice?

Self-assessment can be done by all quarterly taxpayers, however, 35% challan will not be made available for the following person.

A) New Taxpayers

B) Taxpayers who have opted out of the composition scheme.

C) Those who have not filed their last form GSTR 3B.

Note- It is not mandatory for exercising the same option for both the months, you may choose self assessment or 35% as per your own choice for any of the months.

Third month under “Quarterly Return and Monthly Payment Scheme” (M3)

It is the last month of the quarter where taxpayers have to file form GSTR 3B and GSTR 1 for the quarter end.

For Example- For the quarter of January to March, you have to file for GSTR 1 and GSTR 3B for the month of March.

Note- Here “M3” refers to third month of the quarter.

What is the due date of form GSTR 3B under the QRMP Scheme?

The due date of GSTR 3B under “Quarterly Return and Monthly Payment Scheme” will be as per the below table- (subject to the condition that there is no change of date done by the government)

S. No.Class of Registered PersonDue Date
1.Registered persons whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman, and the Nicobar Islands or Lakshadweep,22nd of the month succeeding such month.
2.Registered persons whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi24th of the month succeeding such quarter.

What is the due date of form GSTR 1 under the QRMP Scheme?

The due date of GSTR 1 under “Quarterly Return and Monthly Payment Scheme” will be the 13th of the month succeeding such quarter. (subject to the condition that there is no change of date done by the government)

For Example- For the quarter of January to March, the last date of GSTR 1 would be 13th of the April.

What is the late fee for late filing of Form GSTR 1 and/or GSTR 3B?

Quarterly Return and Monthly Payment Scheme Late Fees- Late fee is applicable for delay in furnishing of return /details of outward supply as per the provision of Section 47 of the CGST Act. As per the Scheme, the requirement to furnish the return under the proviso to sub-section (1) of Section 39 of the CGST Act is quarterly. Accordingly, a late fee would be the application for the delay in furnishing of the said quarterly return/details of outward supply. It is clarified that no late fee is applicable for delay in payment of tax in the first two months of the quarter.

How to file invoices, credit/debit notes under Quarterly Return and Monthly Payment Scheme?

Invoice Furnishing Facility (IFF)- The registered persons opting for the Scheme would be required to furnish the details of an outward supply in FORM GSTR-1 quarterly as per rule 59 of the CGST Rule. The details of which are given in the below paragraphs.

What is Invoice Furnishing Facility (IFF)?

IFF is an additional facility provided to taxpayers to file their invoices in months M1 and M2 (The first two months of the quarter). This is just similar to form GSTR 1 but it allows the filing of only B2B invoices, credit notes, debit notes, etc.

Is there any time limit for filing of invoices?

The option to file invoices for months M1 and M2 will expire by the 13th of the succeeding month for example- the facility for the month of January will expire by 13th of the February.

It means that for each of the first and second months of a quarter, such a registered person will have the facility (Invoice Furnishing Facility- IFF) to furnish the details of such outward supplies to a registered person, as he may consider necessary, between the 1st day of the succeeding month till the 13th day of the succeeding month.

Note- As a facilitation measure, continuous upload of invoices would also be provided for the registered persons wherein they can save the invoices in IFF from the 1st day of the month till the 13th day of the succeeding month.

Can invoices be filed after the 13th of the succeeding month?

No, this facility for furnishing IFF for the previous month would not be available after the 13th of the succeeding month.

Will the recipient view these uploaded invoices in the form GSTR 2A/2B?

Yes, 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.

The Invoice furnishing facility is optional or compulsory?

It is an optional facility, a registered person may choose to furnish the details of outward supplies made during a quarter in FORM GSTR-1 only, without using the IFF.

Some Other Important FAQ for Quarterly Return and Monthly Payment Scheme

FAQs

  1. Is the QRMP Scheme is available to everyone?

    No, the scheme is available only to those who are liable to file Form GSTR 1 and GSTR 3B.

  2. Am I eligible for the QRMP Scheme?

    All taxpayers whose aggregate turnover is up to Rs. 5 Crore in the current and preceding financial year and who have filed their last due GSTR 3B return are eligible for this scheme.

  3. I have multiple GSTNs on the same PAN in different states, can I opt in for different frequency in different state?

    Yes, you may opt in for different frequencies (monthly or quarterly) in different states.

  4. Can NIL return under the QRMP scheme be filed through SMS?

    Yes, NIL return 9 (GSTR 1 and GSTR 3B) can be filed through SMS by sending following SMS to 14409.
    NIL 3B GSTIN MMYYYY
    NIL R1 GSTIN MMYYYY

    Here MM should be the last month of the quarter for which the NIL return is being filed.

  5. Will refund be allowed for?

    Yes, quarterly taxpayers may apply for refunds after filing their Form GSTR 3B for the quarter.

  6. Which form/challan is eligible for payment of tax?

    The payment of tax for the first two months should be made through challan in the form GST PMT 06.

  7. By when challan generated in QRMP Scheme needs to be deposited?

    Generally, Challan has to be deposited by the 25th of the next month, provided that the date for the same not extended by the government.

  8. Can the amount paid in first two month (M1 and M2) of quarter be utilized for any other purpose?

    No, until the GSTR 3B for the same quarter is not filed, you can not utilize this cash balance in any way but once the GSTR 3B for the same quarter has filed you may utilize it for any other purpose.

  9. Do I have to re-enter the details entered through invoice furnishing facility in the GSTR-1 for the quarter?

    No, once details have been filed in IFF, the same need not be filed again in GSTR-1 for the quarter.

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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)

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