Introduction

GST Council in its 42nd meeting, introduced Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme for small taxpayer, to reduce their compliance burden.

Under QRMP Scheme, small taxpayer having turnover upto Rs 5 Cr in preceding financial year can opt to file GSTR-3B on quarterly basis instead of monthly (as now). The scheme will be implemented with effect from 01 Jan 2021.

Contents of this Article

Eligibility for the QRMP 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. The aggregate turnover of preceding financial year is calculated by portal itself on the basis of the return furnished by taxpayer in preceding 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. For example: If a registered person wants to opt to file quarterly returns for the quarter of Jan-Mar 2021, he should opt for quarterly filing on the portal between 1st November 2020 and 31st January 2021.

However, the tax payer are not required to exercise the option every quarter.

Ineligibility for QRMP Scheme

Once the registered person has opted for quarterly filing, he will have to continue to furnish his return every quarter for all future tax periods, except in the following situations:

  1. If the aggregate turnover crosses Rs.5 crore during a quarter, then from the next quarter he will not be able to file quarterly returns.
  2. Registered person will not be eligible to opt for furnishing quarterly returns if the last return, which was due on the date of exercising such an option has not been furnished.

Default Migration in 1st Quarter

In the 1st quarter of the scheme i.e., Jan-Mar 2021, the eligible registered person are auto migrated in the following option:

S.No. Class of registered person Default Option
1 Furnished GSTR-1 on monthly basis (having Turnover upto Rs 1.5 Cr in current year) Monthly Return
2 Furnished GSTR-1 on quarterly basis (having Turnover upto Rs 1.5 Cr in current year) Quarterly Return
3 Having Turnover more than Rs 1.5 Cr and up to Rs 5 Cr in the preceding year Quarterly Return

However, the registered person can change the default migration between 5th December 2020 and 31st January 2021.

Comparison

Basis GSTR-3B Monthly (If not opt for QRMP Scheme) GSTR-3B Quarterly (If opt for QRMP Scheme)
Return filed Monthly Quarterly
Tax payment Monthly Monthly
Due date of tax payment 20th of the following Month of Tax Period 25th of following month for 1st and 2nd month of quarter
Payment Method Self-Assessment method Self-assessment method or fixed
Invoice Furnishing Facility Not available Available

Payment Method

Under QRMP Scheme, the taxpayer has to deposit the tax monthly by the 25th of the following month, for 1st and 2nd month of quarter. The tax payer can pay their monthly tax liability either in the Fixed Sum Method (FSM) or Self-Assessment Method.

Fixed Sum Method:

Under Fixed Sum Method, the taxpayer has to pay 35% of tax paid in the preceding quarter, in case taxpayer has furnished GSTR-3B quarterly for the last quarter and 100% of tax paid in the last month of immediately preceding quarter, in case taxpayer has furnished GSTR-3B monthly during the last quarter.

Self- Assessment Method:

This is the existing method where a taxpayer can pay the tax liability by considering the tax liability on inward and outward supplies and the input tax credit available. The taxpayer has to manually arrive at the tax liability for the month and has to pay the same in form GST PMT-06. For ascertaining the amount of ITC available for the month the taxpayer can use form GSTR-2B.

Invoice Furnishing Facility

The taxpayers who opted for the QRMP scheme can use the Invoice Furnishing Facility (IFF) which allows quarterly GSTR-1 filers to upload their invoices every month.

Under Invoice furnishing Facility, the taxpayer can upload the B2B invoices of value upto Rs 50 lakhs per month for 1st and 2nd month of the quarter and not required to upload the same in GSTR-1 again. On the basis of the invoice uploaded under IFF, the recipient of goods or services, can take ITC as same has been reflected in GSTR-2A/2B, GSTR-4A or GSTR-6A as the case may be.

Conclusion

With the introduction of the QRMP scheme, small taxpayers would need to file only eight returns – four GSTR-3B and GSTR-1 each – instead of the existing requirement of 16 returns in a financial year, of which 12 are GSTR-3B. The new scheme would also significantly reduce taxpayers’ professional expenses on return filing as they would have to file just half the number of returns as against the current requirement of 16. Also, the QRMP scheme would be available on the common GST portal with the facility to opt-in and opt-out, and opt-in again, as per a taxpayer’s wishes.

The scheme also bring in the concept of providing input tax credit (ITC) only on the reported invoices under IFF, thus putting a curb on the menace of fake invoice frauds.

Therefore, this initiative by Government is somehow benefits the small payer payers.