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QRMP Scheme - Pros and Cons?

 

IFF - An unsaid monthly compliance?

In this article you would learn -

1. Basics of QRMP Scheme?

2. Eligibility for QRMP Scheme?

3. How and when to opt for QRMP Scheme?

4. Due date for filing GST Returns under QRMP Scheme?

5. Payment of taxes under QRMP Scheme?

6. Pros and Cons of QRMP Scheme?

7. IFF - An unsaid monthly compliance?

During the 42nd GST Council Meeting, it was recommended the quarterly filing of returns for small taxpayers. Accordingly, Quarterly Return Monthly Payment Scheme, shortly and more popularly known as QRMP scheme, was introduced and made effective from 1st January 2021. The current article highlights various features of the QRMP Scheme.

Basics of the QRMP Scheme

The following points briefs the basics of the QRMP Scheme-

  • QRMP scheme is optional in nature.
  • The eligible registered person opting under the QRMP scheme will be required to file a return on a quarterly basis. However, tax payments are to be done on monthly basis.
  • The scheme is made effective from 1st January 2021. Accordingly, the quarterly filing of return is also available from 1st January 2021.

Eligibility criteria for opting under QRMP Scheme-

The registered person needs to satisfy the following criteria for getting eligible for opting under the QRMP scheme-

  1. The registered person is required to file a return in Form GSTR-3B; and
  2. An aggregate annual turnover of the registered person is up to INR 5 Crores in the preceding financial year.

Steps for opting under QRMP Scheme-

The taxpayer can opt under the QRMP Scheme by following the below simple steps-

STEP 1 – Go to https://www.gst.gov.in/ and enter appropriate credentials.

STEP 2 – Select Services > Returns > Opt-in for Quarterly Return.

STEP 3 – Select Financial Year from the drop-down list and select ‘Quarterly’.

Time limit for opting under QRMP Scheme

Opting under the QRMP scheme is optional for the taxpayer. Hence the taxpayer who wishes to opt under the QRMP scheme needs to indicate the same on the GST portal within the following time limit-

  • From the 1st day of the second month of the preceding quarter till the last day of the first month of the relevant quarter.
  • In simple terms, the time limit to opt under QRMP is summarized hereunder-

Quarter

Time period within which option needs to be exercised

April – June

1st February to 30th April

July – September

1st May to 31st July

October – December

1st August to 31st October

January – March

1st November to 31st January

 

Let us understand the above time limit with the help of an example-

Suppose Mr. X wishes to opt for the QRMP scheme from the quarter July 2021 to September 2021. Accordingly, Mr. X should indicate/ select the quarterly filing option on the GST portal within the period 1st May 2021 to 31st July 2021.

Notably, the taxpayer once opted for quarterly filing of Form GSTR-3B will continue to furnish the same on a quarterly basis. However, quarterly filing will be discontinued only under the following circumstances-

  1. Taxpayer himself opts out of the QRMP scheme; or
  2. Aggregate turnover exceeds INR 5 Crores and accordingly, quarterly filing will not be feasible.

Due date for filing quarterly return under QRMP Scheme

As per proviso to rule 61(1) of the Central Goods and Services Tax Rules, 2017, the due date for filing quarterly return in Form GSTR-3B is tabulated hereunder-

Due date for registered person having principal place of business in any of the following states/ union territory is 22nd of the month succeeding the quarter-

States

Union Territory

Chhattisgarh

Daman and Diu

Madhya Pradesh

Dadra and Nagar Haveli

Maharashtra

Puducherry

Goa

Andaman and Nicobar Island

Gujarat

Lakshadweep

Karnataka

 

Tamil Nadu

 

Kerala

 

Telangana

 

Andhra Pradesh

 


Due date for registered person having principal place of business in any of the following states/ union territory is 24th of the month succeeding the quarter-

States

Union Territory

Punjab

Jammu and Kashmir

Himachal Pradesh

Ladakh

Haryana

 

Uttarakhand

 

Rajasthan

 

Bihar

 

Uttar Pradesh

 

Arunachal Pradesh

 

Sikkim

 

Nagaland

 

Mizoram

 

Manipur

 

Tripura

 

Assam

 

Meghalaya

 

Odisha

 

West Bengal

 

Jharkhand

 

Chandigarh

 

Delhi

 

Payment of tax under QRMP Scheme

The taxpayer opting under the QRMP scheme should always keep in mind that QRMP facilitates quarterly filing of the return, however, the payment of tax is to be done on monthly basis only.

Accordingly, tax is to be deposited via Form GST PMT-06 for the first and the second month of the respective quarter. Tax is to be paid within the 25th of the succeeding month. A taxpayer can adopt any of the following methods for the payment of tax for the first and the second month-

  1. Fixed Sum Method-

Here, pre-filled challan in Form GST PMT-06 will be generated for an amount based on the following calculation-

Particulars

Amount for which pre-filled challan would be generated

Cases, wherein, the preceding return was furnished on a quarterly basis

35% of amount paid as tax from Electronic Cash Ledger in their preceding quarter GSTR 3B return.

Cases, wherein, the preceding return was furnished on a monthly basis

100% of the amount paid as tax from Electronic Cash Ledger in their GSTR-3B return for the last month of the immediately preceding quarter.

It is important to note that payment of tax under the Fixed Sum Method is possible only if the return for a complete tax period is filed.

  1. Self-Assessment Method-

Here, the taxpayer will manually arrive at the tax liability by calculating tax liability in the following manner-

Formula for tax payable under Self-Assessment Method

Amount

Tax payable on outward supplies

XXX

ADD: Tax payable on inward supplies as per Reverse Charge Mechanism (RCM)

XXX

(LESS): Eligible Input Tax Credit

(XXX)

Tax payable under Self-Assessment Method

XXX

Here also payment of tax is to be done via Form GST PMT-06.

Pros and Cons of QRMP Scheme

Since the QRMP scheme is optional, there is a lot of confusion within the taxpayer regarding whether to opt or not under the scheme. Going through below pros and cons will enable the taxpayer to decide the same-

Pros of QRMP Scheme

  1. Reduces the compliance burden of the taxpayer.
  2. Reduction in compliance will obviously reduce the compliance cost of the taxpayer.
  3. The taxpayer will have to file only four return in Form GSTR-3B as against 12 monthly returns. Further, a taxpayer will have to file only four Form GSTR-1 return as against 12 monthly returns.
  4. It is easy to opt-in and out of the QRMP scheme.
  5. Filing of B2B invoice details via Invoice Furnishing Facility (IFF) will enable the buyer to avail ITC on monthly basis.

Cons of QRMP Scheme

  1. QRMP Scheme facilitates taxpayer to furnish return on a quarterly basis, however, payment of tax is to be done on monthly basis only.
  2. In spite of the quarterly filing of returns under QRMP, in order to benefit the buyer to avail monthly ITC, the supplier will have to update the invoice details via Invoice Furnishing Facility (IFF). Accordingly, the same will add up to the compliance as well as the compliance cost.

"This is the main drawback of QRMP scheme. From legal point, IFF is optional, but for all practical purposes, IFF becomes an unsaid monthly compliance."

 

Our previous Articles on QRMP Scheme.

1. QRMP (Quarterly Return Monthly Payment) Scheme

2. FAQ on QRMP Scheme & IFF by GSTN

3. GSTN Advisory on Payment of Tax under QRMP Scheme

4. GSTN Advisory on Invoice Furnishing Facility (IFF) for Taxpayers under QRMP Scheme


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Author:

CA Poonam Gandhi


Jun 15, 2021

Comments


Monthly R1 Quarterly 3B "
with Quarterly Payment Scheme to be Introduced to small tax payers whos turnover is less then 5 Crores & who gets credit for the period 3 to 6 months .
This Scheme makes small tax payers to carryout ease of business
By: K R Prakash | Dt: Jun 15, 2021
I sale only b2c so I think no monthly gst payment applicable to me?
By: Abhishek Kumar | Dt: Jun 16, 2021


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