QRMP Scheme: An Overview of Quarterly Return and Monthly Payment Option under Goods and Service Tax (GST)
The Goods and Service Tax (GST) Council, in its 42nd meeting, on October 5, 2020, recommended that registered persons under GST with an aggregate annual turnover of up to INR 5 Crore may be allowed to furnish Quarterly Returns and Monthly Payment of GST, effective from January 1, 2021. The intent behind this is to facilitate trade and provide ease in doing business. Thus the option of Quarterly Return filing and Paying Monthly taxes is rightly referred to as ‘QRMP Scheme’.
This guide gives a detailed explanation of the QRMP Scheme since its inception. Let’s look at it!
Contents :-
Related Post
About QRMP Scheme
The Quarterly Return Monthly Payment (QRMP) Scheme is designed to simplify the compliance for small taxpayers. Under the said scheme, taxpayers with an aggregate annual turnover up to INR 5 Crore at PAN level, can opt for the quarterly filing of Forms GSTR-1 and GSTR-3B. GST payment can be made through Form GST PMT-06. To simplify the tax compliance process further, the GST portal automatically assigns quarterly frequency to small taxpayers.
Distinct Features of the QRMP Scheme
The following are the distinctive features of the QRMP Scheme:
-
The option to enroll in the QRMP Scheme is available throughout the year to the registered persons on the common portal of GST.
-
As per Rule 61A of the CGST Rules, the registered person can opt in for the QRMP Scheme for any quarter between the first day of the second month of the preceding quarter and the last day of the first month of the quarter. Moreover, the registered person must have furnished the last return within the due date.
-
Likewise, the option to opt out of the QRMP Scheme for the quarter is available from the first day of the second month of the previous quarter until the last day of the first month of the next quarter.
-
It is pertinent to note that the registered persons are not required to avail the QRMP option each quarter after availing the same once. Only, when the option is intended to be revised by the registered person, the changes need to be made.
-
Persons who register or opt out of paying tax under Section 10 of the CGST Act can select the QRMP Scheme for the quarter in which the facility is available on the date of exercising the option.
-
If a registered person’s annual turnover exceeds INR 5 Crore during a quarter of the present financial year, a monthly return must be submitted electronically through the common portal, beginning from the following quarter.
-
The QRMP Scheme option is available GSTIN-wise to the registered persons, even those with the common PAN. Moreover, a few GSTINs under the same PAN can choose to participate in the QRMP Scheme, while others may not.
Who is Eligible for the QRMP Scheme?
According to the Notification No. 84/2020 of the Central Tax dated November 10, 2020, a registered person under GST, who furnishes Return under Form GSTR-3B, with an aggregate annual turnover of INR 5 Crore in the preceding financial year is eligible for the QRMP Scheme. The aggregate annual turnover for the preceding financial year will be determined through the common portal of the GST. However, if after enrolling in the QRMP Scheme, the aggregate annual turnover of the registered person crosses INR 5 Crore in any quarter during the year, the person will become ineligible for the Scheme.
Section 37 of the Central Goods and Service Tax (CGST) Act
-
Registered persons participating in the QRMP Scheme must submit quarterly outward supply details in Form GSTR-1 as per Rule 59 of the CGST Rules.
-
During the first and second months of a quarter, a registered person can use the Invoice Furnishing Facility (IFF) to provide the details of outwards supplies to another registered person between the 1st and 13th of the following month. Outward supplies cannot exceed INR 50 Lakh per month. After the 13th of each month, the option to provide IFF for the previous month is no longer available. To improve efficiency, registered users can save invoices in IFF from the first to the 13th of each month. IFF allows for invoice details to be reflected in the recipient’s Form GSTR-2A and GSTR-2B.
-
The IFF is an optional facility available to the registered persons under the QRMP Scheme, not a mandatory requirement.
-
In the first two months, invoices submitted via IFF do not need to be updated in the Form GSTR-1. During a quarter, a registered person’s outward supplies must include IFF invoices for the first two months and Form GSTR-1 invoices for the remaining month. A registered person has the option to report outward supplies made during the quarter using GSTR-1 instead of the IFF.
Monthly Tax Payments
Registered persons under the QRMP Scheme should pay taxes for the first two months of the quarter by depositing the amount in Form GST PMT-06 by the 25th of the following month. To generate the challan, the registered person should select the reason for challan as: ‘Monthly Payment for Quarterly Taxpayer’. Moreover, during the first two months, the person can choose between two options for monthly tax payments:
Fixed Sum Method: A facility has been made available on the GST portal allowing registered persons to generate a pre-filled challan in Form GST PMT-06 for either 35% of the tax paid in cash in the previous quarter for the quarterly returns or the tax paid in cash in the last month of the immediately preceding quarter where the return was furnished monthly.
Self-Assessment Method: The registered person can pay a self-assessment tax using Form GST PMT-06 after considering the tax liability on both inward and outward supplies, and the Input Tax Credit (ITC) as well. Moreover, an auto-populated input tax credit statement (Form GSTR-2B) has been facilitated on the GST portal to help determine the ITC.
The following additional points should be considered while making monthly payments:
-
The registered person can use any of the two tax payment methods listed above during any two months of the quarter.
-
If the balance in the electronic cash ledger or credit ledger is sufficient to pay the tax due for the first month of the quarter or there is no tax liability, the registered person may prefer not to deposit any funds for the said month. In the second month of the quarter, if the balance in the electronic cash ledger or credit ledger is sufficient to pay the accumulated tax for the first and second months, or in case of no tax liability, the registered person may not deposit any amount.
-
To claim a refund towards the amount deposited for the first two months of a quarter’s tax deposit, a return in Form GSTR-3B must be submitted. Moreover, the deposit cannot be used for any other purpose until the taxpayer files the return for the said quarter.
The following additional points should be considered while making monthly payments:
-
The registered person can use any of the two tax payment methods listed above during any two months of the quarter.
-
If the balance in the electronic cash ledger or credit ledger is sufficient to pay the tax due for the first month of the quarter or there is no tax liability, the registered person may prefer not to deposit any funds for the said month. In the second month of the quarter, if the balance in the electronic cash ledger or credit ledger is sufficient to pay the accumulated tax for the first and second months, or in case of no tax liability, the registered person may not deposit any amount.
-
To claim a refund towards the amount deposited for the first two months of a quarter’s tax deposit, a return in Form GSTR-3B must be submitted. Moreover, the deposit cannot be used for any other purpose until the taxpayer files the return for the said quarter.
Quarterly Return Filing: Form GSTR-3B
Registered persons must file Form GSTR-3B for each quarter by the 22nd or 24th of the following month. The taxpayer must fill out Form GSTR-3B by declaring the details such as: quarterly supplies, ITC, and other required information. The registered person’s deposit in the first two months will be debited to offset the liability as per Form GSTR-3B. Once the Form GSTR-3B is filed for the particular quarter, any balance funds can be applied for the refund or can be used for future purposes.
Moreover, if the registered person cancels the registration within the first two months of the quarter, he should still submit the return in Form GSTR-3B for the applicable tax period.
Interest under QRMP Scheme
If tax due is paid within the first two months of the quarter by depositing an auto-calculated fixed sum by the due date, no interest will be levied on the taxpayer. The interest applicability based on the method of payment under the QRMP Scheme is presented in a tabular form as below:
Month | Fixed sum method within due date | Fixed sum method after due date | Self-assessment method within due date | Self-assessment method after due date |
|---|---|---|---|---|
No Late Fee | Late Fee of INR 50/ INR 20 per day will be levied from the due date till the date of actual payment. | No Late Fee | Late Fee of INR 50/ INR 20 per day will be levied from the due date till the date of actual payment. | |
3rd Month | No Interest | Interest @18% from the due date till the date of actual payment. | No Interest | Interest @18% from the due date till the date of actual payment. |
No Late Fee | No Late Fee | No Late Fee | No Late Fee | |
2nd Month | No Interest | Interest @18% from the due date till the date of actual payment. | If liability is short paid, interest @18% from the due date till the date of actual payment. | Interest @18% from the due date till the date of actual payment. |
No Late Fee | No Late Fee | No Late Fee | No Late Fee | |
1st Month | No Interest | Interest @18% from the due date till the date of actual payment. | If liability is short paid, interest @18% from the due date till the date of actual payment. | Interest @18% from the due date till the date of actual payment. |
Late Fee under QRMP Scheme
Section 47 of the CGST Act mandates a late fee for failure to furnish GST Return or details of outward supply on time. According to the QRMP Scheme, it is mandatory to file quarterly returns as per Section 39(1) of the CGST Act. Any delay in submitting the quarterly return or outwards supply details will result in a late fee. Moreover, any delay in the payment of taxes during the first two months of the quarter will not result in any late fee. Normal GSTR-3B, late fees is INR 50 per day (INR 25 each under CGST and SGST Act). While for NIL GSTR-3B, late fees is INR 20 per day (INR 10 each under CGST and SGST Act).
Frequently asked questions
Q
What is the QRMP (Quarterly Return and Monthly Payments) Scheme?
A
The Quarterly Return and Monthly Payments (QRMP) Scheme allows small taxpayers eligible under the scheme to file their GSTR-1 and GSTR-3B on a quarterly basis, while making monthly payments of GST via challan.
Q
Who can enroll under the QRMP Scheme?
A
All taxpayers who have filed their last due Form GSTR-3B return, and whose aggregate annual turnover (PAN based) is up to INR 5 Crore in the current financial year and the previous financial year, if applicable, are eligible for the QRMP Scheme.
Q
Can every taxpayer enroll for the QRMP Scheme?
A
No, not all taxpayers can participate in the QRMP Scheme. The QRMP Scheme is only eligible to the taxpayers who are required to File Forms GSTR-1 and GSTR-3B. The following taxpayers can also participate in the QRMP Scheme:
-
Registered taxpayers including: normal taxpayers, Special Economic Zone (SEZ) Developers, SEZ Units.
-
Taxpayers who have opted out of the Composition Scheme.
-
Persons making applications for fresh registration as a normal taxpayer.
It is important to note that the QRMP Scheme cannot be availed by the taxpayers whose aggregate annual turnover (PAN based) exceeds INR 5 Crores.
Q
What is IFF?
A
The IFF stands for Invoice Furnishing Facility, which allows taxpayers who have chosen the QRMP Scheme to report the outwards supplies to a registered person for the first two months of any quarter. It is a voluntary facility. The last date to file IFF for a month is the 13th of the following month. It will allow the recipient taxpayers to take credit in the same month of invoice, if reported in IFF by the supplier taxpayer under the QRMP Scheme.
Q
Suppose a taxpayer is filing Form GSTR-1 quarterly and Form GSTR-3B monthly. Will he be able to opt out of the QRMP Scheme?
A
The GST system will assign the QRMP Scheme automatically beginning from the quarters January to March 2021. If the taxpayer chooses to opt out of the QRMP Scheme, both the Forms, that is, GSTR-1 and GSTR-3B has to be filed on a monthly basis. The taxpayer may also continue the QRMP Scheme at his own option.
Q
Where can the taxpayer opt-in or opt-out of the QRMP Scheme?
A
To opt-in or opt-out of the QRMP Scheme, the taxpayer must login to the GST portal with the valid credentials and then go to Services > Returns > Opt-in for Quarterly Return.
Q
Suppose a taxpayer has multiple GSTINs under the same PAN in the same or different states. Can he participate in the QRMP Scheme only for specific GSTINs?
A
Yes. The taxpayer can choose to participate in the QRMP Scheme for certain GSTINs, while opting out for the remaining GSTINs registered on a common PAN.
Q
Is it necessary to exercise the QRMP option every quarter?
A
No. The registered persons are not required to exercise the option of QRMP every quarter. Once the option is availed, it will remain active for the future filing periods unless the option is changed or the aggregate annual turnover exceeds INR 5 Crore.
Q
What is the timeline to participate in the QRMP Scheme?
A
Following is the timeline to participate in the QRMP Scheme in a financial year:
Quarter of a Particular Year | QRMP Scheme can be opted in or Opted out during |
|---|---|
Q4 (January to March) | 1st November to 31st January of next year |
Q3 (October to December) | 1st August to 31st October |
Q2 (July to September) | 1st May to 31st July |
Q1 (April to June) | 1st February to 30th April |
Q
Can a taxpayer edit and save the profile for two consecutive quarters in a year?
A
No. The taxpayer cannot save the profile on the GST portal for two consecutive quarters in a year at once. The opt-in or opt-in option is available for a specific quarter only at a given point of time.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
RECENT POST
