- In a recent notification of the Central Board of Indirect Taxes and Customs, the board introduced a Quarterly Return Filing and Monthly Payment of taxes ( QRMP) scheme under the GST regime to support small taxpayers whose turnover is not more than Rs 5 crores.
- This is considered as a whistleblower step towards the aim of increasing and motivating ‘Ease of doing businesses’.
- This scheme allows the taxpayer to file GSTR-3B every quarter and pay tax every month which makes up total of eight returns for small taxpayers.
- This scheme will be effective from 1st January 2021.
Eligibility criteria for the scheme
- In order to avail of this scheme, a registered person is needed to show a return in Form GSTR-3B having the aggregate turnover of up to Rs 5 crore in the preceding financial year shall be eligible for the QRMP scheme.
- The calculation of total annual turnover shall be done on the common portal while keeping in mind the details of the returns by the taxpayer in the preceding financial year.
- If in case the aggregate turnover exceeds Rs 5 crore rupees in any quarter in the present financial year then the person shall not be entitled to this scheme from the next quarter.
Options available in QRMP Scheme
- A registered person can go for any quarter on the first day of the second month of the preceding quarter till the last day of the first month of that quarter.
- The facilities provided on the common portal shall be available throughout the year for the convenience of the taxpayer.
- In the exercise of this option, the person shall produce the last return due as on date.
- For example, a person willing to avail of this scheme for the quarter July to September, then he can opt for the above options from 1st May to 31st July. If he wants to avail on 27th July for the quarter July to September, in this instance he shall provide the return details of June which will be due in July.
Payment of taxes on the monthly basis
- Under this scheme, a person shall be asked to pay tax on a monthly basis in the first two months of the quarter.
- For making payment of taxes the person is required to file Form PMT 06.
- Generally, the due date of paying tax is the twenty-fifths of the succeeding month and for generating the Challan, the taxpayer should opt for ‘monthly payment for the quarterly taxpayer’ as a ground for generating the Challan.
What are the methods used for the monthly payment of tax
Fixed Sum Method
- The person who has furnished a quarterly return in the preceding financial year can pay 35% of the tax paid in cash in the preceding year.
- If in case, the registered has provided the monthly return, he can choose to pay an amount equal to the tax paid in the month of the preceding quarter.
Restriction in Fixed Sum Method
- In this method, monthly tax payments will not be available for the registered user who has not provided the return for the complete tax period in the preceding month.
- A complete tax period shall denote the tax period where a person is registered from the beginning of the tax period and till the last day of the tax period.
Self Assessment Method
- The tax can be paid by the person due while considering the tax liability on inward and outward supplies and available Input Tax Credit.
- In order to facilitate ascertainment of the Input Tax Credit for the month, an auto-drafted input tax credit statement shall be made available in Form GSTR-2B for every month.
- The registered person has full discretion to avail the two payment methods of tax in any of the two months of the quarter.
No Requirement for tax deposit
For instance, if the balance in the credit ledger or cash ledger is enough for the tax due or there is no tax liability then the registered person may not deposit any further amount.
Claim of refund
- The refund shall be permitted only after filing the return in Form GSTR-3B for the first two months of a quarter payment of tax.
- Also, this deposit shall not be used by the taxpayer for any other specific purpose till the filing of return for the quarter.
- In a conclusion, this scheme is a stepping stone that will provide more flexibility and sustainability with regards to the compliance part for the small taxpayers.
- This may be considered as a blessing in disguise for the huge payers that are currently losing due to non providing entries in GSTR-2A as many suppliers are filing GSTR 1 quarterly.
- As an honest taxpayer, we are hoping that the Government will address these issues expediently.