Article on Quarterly Return Monthly Payment Scheme By CA Monish Shah

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GST Quarterly Return filing & Monthly Payment of Taxes (QRMP) Scheme (Circular No. 143/13/2020- GST)( Noti No. 84 & 85- GST)

By CA Monish S Shah
The Central Board of Indirect Taxes and Customs (CBIC) had notified the Quarterly Return Monthly Payment Scheme.

The CBIC while stating the eligibility for QRMP Scheme said that 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.

This new Scheme will be effective from January 1, 2021.

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

Who can opt for the scheme:

Following registered person (hereinafter RP) can file quarterly returns and pay tax on monthly basis w.e.f. 01.01.2021:

An RP who is required to file Form GSTR 3B with Aggregate Annual Turnover of up to Rs 5 Cr. in the previous financial year is eligible.

If Aggregate Annual Turnover crosses Rs 5 Cr. during a qtr., Registered Person will become ineligible for the Scheme from the next quarter.

Any person obtaining a new registration or opting out of the Composition Scheme can also opt for this Scheme. The option to avail of this Scheme can be availed GSTIN wise. Therefore, few GSTINs for that PAN can opt for the Scheme and the remaining GSTINs can remain out of the Scheme.

When Can Person Opt for the Scheme

  • It can be availed at any given point of the time in the year, in any quarter
  • Option once selected shall remain in the scheme unless he chooses to opt out or his Turn Over exceeds Rs 5 crores
  • Those Registered Person are given Default Return Option can choose to opt out of the scheme from 5th Jan 2021 to 31st Jan 2021

Those opting for the scheme can avail the facility of Invoice Furnishing Facility (IFF), so that outward supply is properly reflected in the buyers 2A & 2B. The said details of outward supplies shall, however, not exceed the value of fifty lakh rupees in each month.

 

Payment of Tax under the Scheme

  • RPs need to pay the due in each of the two months (by 25th of next month) in the Qtr., by selecting “Monthly payment for the taxpayer” as a reason for generating Challan.
  • RPs can either use Fixed Sum Method (pre-filled challan) or Self-Assessment Method (actual tax due), for a monthly payment of tax for the t two months, after adjusting ITC.
  • No deposit is required for the month if there is a nil tax liability.
  • Tax deposited for the 02 months can be used for adjusting liability for the qtr. in Form GSTR-3B and can’t be used for any other purpose till the filing of return for the qtr.
  • The 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, late fee would be applicable for delay in furnishing the quarterly return or 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.

Fixed Sum Method

A facility is being made available on the portal for generating a pre-filled challan in FORM GST PMT-06 for an amount equal to 35 per cent. of the tax paid in cash in the preceding quarter where the return was furnished quarterly; or equal to the tax paid in cash in the last month of the immediately preceding quarter where the return was furnished monthly.

For easy understanding, the same is explained by way of illustration in table below:

  1. In case the last return filed was on quarterly basis for Quarter Ending March, 2021:

 

Tax paid in Cash in Quarter (January – March, 2021) Tax required to be paid in each of the months – April and May, 2021
CGST 1000 CGST 350
SGST 1000 SGST 350
IGST 5000 IGST 1750

 

  1. In case the last return filed was on MONTHLY basis for Month Ending March, 2021:

 

Tax paid in Cash in Month (March, 2021) Tax required to be paid in each of the months – April and May, 2021
CGST 100 CGST 35
SGST 100 SGST 35
IGST 500 IGST 175

 

Monthly tax payment through this method would not be available to those registered persons who have not furnished the return for a complete tax period preceding such month. A complete tax period means a tax period in which the person is reg. from the first day of the tax period till the last day of the tax period

Interest on Shortfall

  • No interest would be payable in case the tax due is paid in the first two months of the quarter by way of depositing auto-calculated fixed sum amount as detailed above by the due date. In other words, if while furnishing return in FORM GSTR-3B, it is found that in any or both of the first two months of the quarter, the tax liability net of available credit on the supplies made /received was higher than the amount paid in challan, then, no interest would be charged provided they deposit system calculated amount for each of the first two months and discharge their entire liability for the quarter in the FORM GSTR-3B of the quarter by the due date.
  • In case such payment of tax by depositing the system calculated amount in FORM GST PMT-06 is not done by due date, interest would be payable at the applicable rate, from the due date of furnishing FORM GST PMT-06 till the date of making such payment.
  • Further, in case FORM GSTR-3B for the quarter is furnished beyond the due date, interest would be payable as per the provisions of Section 50 of the CGST Act for the tax liability net of ITC

Interest Example

A Registered Person has opted for the scheme. For the Quarter ended on December he has paid 1000 in cash. He will have to deposit 350 as tax each month of Jan & Feb. Now if the liability for the Quarter ending is coming to 2000 then

If 3B is filled by the due date by properly discharging the liability then on differential 1300 no interest will have to be paid

However if the said 3B is not filled on time then on 1300 interest will have to be paid between the Due Date of 3B for that Month and date of actual Payment of tax

 

SELF ASSESSMENT TAX METHOD

  • The said persons, in any case, can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit available, in FORM GST PMT-06. In order to facilitate ascertainment of the ITC available for the month, an auto-drafted input tax credit statement has been made available in FORM GSTR2B, for every month.
  • The said registered person is free to avail either of the two-tax payment method above in any of the two months of the quarter.
  • It is clarified that in case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the tax due for the first month of the quarter or where there is nil tax liability, the registered person may not deposit any amount for the said month. Similarly, for the second month of the quarter, in case the balance in the electronic cash ledger and/or electronic credit ledger is adequate for the cumulative tax due for the first and the second month of the quarter or where there is nil tax liability, the registered person may not deposit any amount.
  • Any claim of refund in respect of the amount deposited for the first two months of a quarter for payment of tax shall be permitted only after the return in FORM GSTR-3B for the said quarter has been furnished. Further, this deposit cannot be used by the taxpayer for any other purpose till the filing of return for the quarter.
  • 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 same should be discharged through 3B

Changes on the GST Portal:
For qtr. Jan. 2021 to March 2021, all Registered Persons whose Aggregate Annual Turnover for the FY 2019-20 is up to Rs 5 Cr. and have furnished the return in Form GSTR-3B for the month of October 2020 by 30th November 2020, will be migrated by default in the GST system as follows:

Registered Person with Aggregate Annual Turnover Default Return Option
Up to Rs 1.5 Cr., who have furnished Form GSTR-1 on quarterly basis in current financial year Quarterly
Up to Rs 1.5 Cr., who have furnished Form GSTR-1 on monthly basis in current financial year Monthly
More than Rs 1.5 Cr. and up to Rs 5 Cr. in preceding financial Year Quarterly

 

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