QUARTERLY RETURN MONTHLY PAYMENT SCHEME

[Mr. M. GOVINDARAJAN]

Powers of Central Government

The first proviso to section 39(1) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) (as amended by Finance Act, 2019) provides that the Government may, on the recommendations of the Council, notify certain class of registered persons who shall furnish a return for every quarter or part thereof, subject to such conditions and restrictions as may be specified therein.

Quarterly return Monthly Payment scheme

In order to further ease the process of doing business, the GST Council in its 42^nd meeting held on 05.10.2020, had recommended that registered person having aggregate turnover up to ₹ 5 crores may be allowed to furnish return on quarterly basis along with monthly payment of tax, with effect from 01.01.2021.  This scheme is called as ‘Quarterly return Monthly Payment Scheme’. 

This scheme is not mandatory but only optional. 

Notification and circular

To implement the Scheme of quarterly return filing along with monthly payment of taxes, the Central Government has made the following Notifications-

• Notification No. 81/2020-Central Tax, dated 10.11.2020 - the Central Government appointed 10.11.2020, as the date on which the provisions of section 97 of the Finance Act, 2019 shall come into force.
• Notification No. 82/2020-Central Tax, dated 10.11.2020 – CGST Amendment Rules for this purpose.
• Notification No. 83/2020-Central Tax, dated 10.11.2020 – Seeks to extend the due date for Form GSTR-3B.
• Notification No. 84/2020-Central Tax, dated 10.11.2020 – Notification of persons under proviso to section 39(1).
• Notification No. 85/2020- Central Tax, dated 10.11.2020 - seeks to notify the special procedure for making payment of 35% tax as tax liability for the first two months.

In order to explain the Scheme in simple terms and in order to ensure uniformity in implementation across field formations, the Board issued a circular on 10.11.2020 clarifying various issues.

Eligibility

For this purpose the Central Government notified that the registered persons, other than a person referred to in section 14 of Integrated Goods and Services Tax Act, 2017 (payment of tax by a supplier of online information and database access or retrieval services) having an aggregate turnover of up to ₹ 5 crores in the preceding financial year, may opt  to furnish a return for every quarter and make monthly payments.  The aggregate annual turnover for the preceding financial year shall be calculated in the common portal taking into account the details furnished in the returns by the taxpayer for the tax periods in the preceding financial year. 

Ineligibility

A registered person whose aggregate turnover crosses ₹ 5 crores during a quarter in a financial year shall not be eligible for furnishing of return on quarterly basis from the first month of the succeeding quarter.

Exercising option

This scheme will come into effect from 01.01.2021.  The registered person who opts to this scheme shall furnish a return for every quarter from January, 2021 onwards, and pay the tax due every month subject to the following conditions-

• the return for the preceding month, as due on the date of exercising such option, has been furnished:
• where such option has been exercised once, they shall continue to furnish the return as per the selected option for future tax periods, unless they revise the same.

Facility to avail the Scheme on the common portal would be available throughout the year.  A registered person can opt in for any quarter from first day of second month of preceding quarter to the last day of the first month of the quarter.    The registered person must have furnished the last return, as due on the date of exercising such option.

A registered person intending to avail of the Scheme for the quarter ‘July to September’ can exercise his option during 1st of May to 31^st of July.  If he is exercising his option on 27^th July for the quarter (July to September), in such case, he must have furnished the return for the month of June which was due on 22/24^th  July.

The distinct persons as defined in Section 25 of the CGST Act (different GSTINs on same PAN) have the option to avail the QRMP Scheme for one or more GSTINs. In other words, some GSTINs for that PAN can opt for the QRMP Scheme and remaining GSTINs may not opt for the Scheme.

Deemed option

The registered person who have furnished the return for the tax period October, 2020 on or before 30^th  November, 2020, it shall be deemed that they have opted under sub-rule (1) of rule 61A of the said rules for the monthly or quarterly furnishing of return-

• Registered persons having aggregate turnover of up to ₹ 1.5 crores, who have furnished FORM GSTR-1 on quarterly basis in the current financial year – Quarterly return is the deemed option;
• Registered persons having aggregate turnover of up to ₹ 1.5 crores, who have furnished FORM GSTR-1 on monthly basis in the current financial year – monthly return is the deemed option;
• Registered persons having aggregate turnover more than ₹ 1.5 crores and up to ₹ 5 crores in the preceding financial year – quarterly return is the deemed option.

The above may change the default option electronically, on the common portal, during the period from the 5th day of December, 2020 to the 31^st  day of January, 2021.

Migration

The registered person who opts for QRMP scheme shall migrate on the common portal.  The taxpayers may furnish the return of October, 2020 in time so as to be eligible for default migration.   The taxpayers who have not filed their return for October, 2020 on or before 30.11.2020 will not be migrated to the Scheme.    He will be able to opt for the Scheme once the Form GSTR-3B as due on the date of exercising option has been filed.

Invoice Furnishing Facility

The registered persons opting for the Scheme would be required to furnish the details of outward supply in Form GSTR-1 quarterly.   For each of the first and second months of a quarter, the registered person will have the ‘Invoice Furnishing Facility’ (IFF) to furnish the details of such outward supplies to a registered person, as he may consider necessary, between the 1^st day of the succeeding month till the 13^th day of the succeeding month, not exceeding the value of fifty lakh rupees in each month.  After 13^th of the month, this facility for furnishing IFF for previous month would not be available.    The facility of furnishing details of invoices in IFF has been provided so as to allow details of such supplies to be duly reflected in the Form GSTR-2A and Form GSTR-2B of the concerned recipient.

The details of invoices furnished using the said facility in the first two months is not required to be furnished again in Form GSTR-1.   The details of outward supplies made by such a registered person during a quarter shall consist of details of invoices furnished using IFF for each of the first two months and the details of invoices furnished in Form GSTR-1 for the quarter.   A registered person may choose to furnish the details of outward supplies made during a quarter in Form GSTR-1 only, without using the IFF.

Payment of tax

The registered person, opting this scheme, shall pay the tax due in each of the first two months of the quarter by depositing the due amount in Form GST PMT-06.  The payment should be made by 25^th day of the month succeeding such month.   The taxpayer should select ‘Monthly payment for quarterly taxpayer’ as reason for generating the challan.   There are two options for making payment monthly as detailed below-

• Fixed Sum payment; and
• Self assessment method.

The registered person is free to avail either of the two tax payment method above in any of the two months of the quarter.

Fixed sum payment method

In this method the registered person has to pay-

• an amount equal to 35% 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.

This method would not be available to those registered persons who have not furnished the return for a complete tax period preceding such month. 

Self assessment method

The registered person 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 input tax credit available for the month, an auto-drafted input tax credit statement has been made available in Form GSTR-2B, for every month.

When payment may not be made?

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.

Refund

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.

Filing of GSTR – 3B return

The registered person, opting this scheme, would be required to furnish Form GSTR-3B, for each quarter, on or before 22nd or 24^th  day of the month succeeding such quarter.  In this form the registered person shall declare the supplies made during the quarter, input tax credit availed during the quarter and all other details required to be furnished therein.   The amount deposited by the registered person in the first two months shall be debited solely for the purposes of offsetting the liability furnished in that quarter’s Form GSTR-3B.  The excess may either be claimed as refund or may be used for any other purpose in subsequent quarters.

In case of cancellation of registration of such person during any of the first two months of the quarter, he is still required to furnish return in Form GSTR-3B for the relevant tax period.

Payment of interest

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.   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.  If Form GSTR-3B for the quarter is furnished beyond the due date, interest would be payable for the tax liability net of input tax credit.

The interest amount would be for tax or any part thereof (net of input tax credit) which remains unpaid / paid beyond the due date for the first two months of the quarter.

Interest payable, if any, shall be paid through Form  GSTR-3B.

Late fee

Late fee is applicable for delay in furnishing of return / details of outward supply.  The late fee would be the applicable for delay in furnishing of the said quarterly return / details of outward supply.  No late fee is applicable for delay in payment of tax in first two months of the quarter.

Discussions to this article

[Ganeshan Kalyani]

Nicely compiled. Thanks for sharing.