The Goods and Service Tax Network (GSTN) has issued further Clarification on provisions of Quarterly Return Monthly Payment (QRMP) Scheme vide a Circular dated 11.02.2021. The Circular contains the clarifications on various issues of the QRMP Scheme in the form of frequently asked questions (FAQs). The GST registered person having an aggregate turnover of five crore rupees will be allowed to furnish return every quarter along with monthly payment of tax by opting QRMP Scheme. In the present article, we are covering the Clarifications issued by the GSTN in respect of the QRMP Scheme
Clarification on Benefits of QRMP Scheme
Quarterly Return, Monthly Payment of Taxes (QRMP) Scheme is introduced to simplify compliance for small taxpayers. Under this scheme, taxpayers having an aggregate turnover at PAN level up to Rs. 5 crores can opt for quarterly GSTR-1 and GSTR-3B filing.
Clarification on Allocation of Quarterly Filing without Opting QRMP
GSTIN clarified that taxpayers eligible for the simplified compliance scheme were assigned quarterly frequency by the GST system. All taxpayers were informed regarding the frequency assigned to them by e-mail and SMS.
Clarification on Eligibility of QRMP Scheme
Allocation of quarterly frequency when Aggregate turnover on PAN is greater than Rs. 5 crore
For determining the eligibility for QRMP scheme, the turnover was determined based on the values declared by taxpayers in GSTR-3B return (except inward supplies attracting reverse charge) for the Financial Year 2019-2020.
- If a component of the turnover, like exempted or non-GST turnover, was not declared by a taxpayer in GSTR-3B return or was declared in next financial year, then the turnover computed by the system for such taxpayers could be less than Rs.5 crore.
- Such taxpayers may have been assigned to QRMP based on values declared by them in GSTR-3B. Such taxpayers are advised to opt-out of the scheme for quarter April-June’2021 by 30th April 2021.
Allocation of quarterly frequency by the system when Aggregate turnover on PAN is Upto Rs. 5 crore
- At the time of assigning the frequency by the system, the system considered the aggregate turnover of the taxpayer and the filing status of FORM GSTR-3B for October 2020.
- If the October GSTR3B was not filed till 30th November 2020, the taxpayer was assigned to a monthly frequency.
- The system allows the taxpayer to opt for QRMP scheme only if the last applicable return in FORM GSTR-3B, whose due date is over, is filed
Clarification on Procedure to opt-out of QRMP scheme and become monthly filer for the quarter January-March, 2021
- The last date to choose or change the filing frequency for the quarter of January to March 2021 was 31st January 2021.
- After 31st January 2021, the filing frequency cannot be changed for the quarter of January to March 2021.
- However, for the quarter of April to June 2021, taxpayers may change their filing frequency from quarterly to monthly from 1st February 2021 to 30th April 2021.
Note: The profile selection is not a recurring requirement every quarter. Once a frequency has been opted for, it is applicable for all future periods unless changed further.
Clarification on Invoice Furnishing Facility
Invoice Furnishing Facility (IFF) is an optional facility made available as per the Central Goods and Services Tax (CGST) Rules, 2017. This is provided for those quarterly taxpayers who want to pass on input tax credit (ITC) to their recipients (buyers/customers) in the first two months of a quarter.
Since IFF is an optional facility, it poses no additional compliance burden. It is a facility for those quarterly filers who intend to pass ITC to their recipients in the first two months of the quarter.
Note: Since IFF is an optional facility, IFF for a month will expire after the due date of 13th of next month, and cannot be filed after this date
- Invoice Furnishing Facility (IFF) is an optional facility for those taxpayers who want to pass on input tax credit (ITC) to their recipients (buyers/customers) in first two months of a quarter.
- Those taxpayers who do not have to pass credit to their recipients need not file IFF in the first two months of the quarter. They may declare their outward supplies in the quarterly FORM GSTR-1
Clarification on Procedure to make payment under QRMP scheme
In the first two months of the quarter, payment of liability can be made by either of the following two methods:
- Self-Assessment Method
- Fixed Sum Method
Fixed Sum Method: Portal will generate a pre-filled challan in Form GST PMT-06. The system generated pre-filled challan, in this case, is commonly also known as 35% challan.
Self-Assessment Method: The actual tax due is to be paid through challan, in Form GST PMT-06, by considering the tax liability on inward and outward supplies and the input tax credit available for the period as per law.
Note: The due date for making payment by challan is 25th of the next month.
Fixed Sum Method of Payment
As mentioned above, the taxpayer is required to pay a system generated challan in the first two months of a quarter for a fixed sum method of payment.
The system generated pre-filled challan, in this case, is commonly also known as 35% challan. If fixed sum method is opted for by the taxpayer and there is no ITC to be passed in that month, then except for paying system generated challan, no other compliance requirement is there in the first two months of the quarter
35% challan Computation under the Fixed Sum Method
Under the fixed sum method, depending on the filing frequency in the previous quarter, the 35% challan is calculated by either of the following methods:
- Method (a): An amount which is equivalent to the amount paid as tax from electronic cash ledger in their GSTR-3B return for the last month of the immediately preceding quarter, where the GSTR-3B return was furnished on monthly basis.
- Method (b): 35% of the amount paid as tax from electronic cash ledger in the return for the preceding quarter, where the GSTR-3B return was furnished every quarter; or It may be noted that since
Note: QRMP scheme is introduced in January 2021, all taxpayers were monthly filers in December 2020. Hence, the 35% challan will be populated as per method (a) for the quarter of January to March 2021 for quarterly filers.
Clarification on the declaration of B2C supplies in IFF
Supplies made to unregistered persons (also called B2C supplies) are not required to be declared in IFF. These may be declared in FORM GSTR-1 for the quarter.
Procedure to reconcile the values declared in IFF & GSTR-1 with quarterly GSTR-3B
Taxpayers will be provided with a draft GSTR-3B, which will contain the details of the liability to be paid by taxpayers in the quarterly GSTR-3B. This will be prepared based on the supplies declared in FORM GSTR-1 for the quarter.
It will also contain data from the optional IFF if any is filed in either of the first two months of the quarter. The said system computed values will also be auto-populated in quarterly GSTR-3B
Procedure to claim ITC for the first two months of the quarter
- In the first two months of the quarter, no declaration about ITC is required to be made.
- The available ITC for the entire quarter will be made available by the system in quarterly FORM GSTR-2B.
- This quarterly facility will be in addition to the FORM GSTR-2B being made available on monthly basis, which can still be used for doing self-assessment.
Procedure to Become a Monthly Filer
Filing frequency either monthly or quarterly can be selected as per timelines mentioned below the table.
The period during which filing frequency can be selected
Last date for selecting the filing frequency
|January–February– March||1st November to 31st January||31st January|
|April – May – June||1st February to 30th April||30th April|
|July – August – September||1st May to 31st July||31st July|
|October – November – December||1st August to 31st October||31st October|
Click here to know more about the official notification pertaining to the Clarification on QRMP Scheme