Implementation of Scheme of quarterly return filing along with monthly payment of taxes - Customs - TRADE NOTICE NO.: 07/2020 PCC/GST/POLICY

MINISTRY OF FINANCE DEPARTMENT OF REVENUE OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF CENTRAL TAX KARNATAKA ZONE, P.B.No. 5400, C.R. BUILDING, QUEENS ROAD, BENGALURU-560001 C. No GCCO/TECH/PN/07/2020 S I Dated:-11.11.2020 TRADE NOTICE NO.: 07/2020 PCC/GST/POLICY Sub: Implementation of Scheme of quarterly return filing along with monthly payment of taxes Attention is invited to the Trade Notice No 06/2020 dated 15-10-2020 wherein the decisions taken by the 42nd GST Council were communicated. The Government has issued the following notifications to give effect to the amendments made to the CGST Act vide the Finance Act 2019 and to implement the Scheme of quarterly return filing along with monthly payment of taxes: Sl.No. Notification No Date Subject 1 81/2020 Central Tax dated 10-11-2020 Appoints 10th November 2020 as the date when the provisions of Section 97 of the Finance Act, 2019 which amended sub-section (1), (2) and (7) of section 39 of the CGST Act comes into force. 2 82/2020 Central Tax dated 10-11-2020 Amends the CGST Rules, 2017: - Rule 59 (Manner of furnishing details ofoutward supplies), Rule 60 (Manner ofascertaining details of inward supplies) and Rule 61 (Manner of furnishing of return) of the CGST Rules have been substituted with effect from 1st January 2021 - Sub-rule (6) to Rule 61 inserted with effect from 10th Nov 2020 - Rule 61A (Manner of opting for furnishing quarterly return) has been inserted with effect from 1st January 2021. 3 83/2020 Central Tax dated 10-11-2020 Seeks to extend the due date for filing GSTR 1 with effect from 1st January 2021: - For monthly filers of GSTR-1 11th of the following month - For quarterly filers of GSTR-1 13th day of the month following the quarter 4 84/2020 Central Tax dated 10-11-2020 Notifies the conditions and restrictions for opting for the Quarterly Return Monthly Payment scheme under Rule 61A of the CGST (Thirteenth Amendment) Rules, 2020. 5 85/2020 Central Tax dated 10-11-2020 Notifies with effect from 1st January 2021, the special procedure for making payment of 35% of tax in the 1st two months of the quarter for those who have opted for the Quarterly Return Monthly Payment scheme. 6 86/2020 Central Tax dated 10-11-2020 Seeks to rescind Notification No 76/2020 Central Tax dated 15-10-2020 7 87/2020 Central Tax dated 10-11-2020 Seeks to extend the time limit for furnishing the Form ITC-04 for the period July 2020 to September 2020 till 30th November 2020 8 88/2020 Central Tax dated 10-11-2020 Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding ₹ 100 Cr from 01st January 2021. The CBIC has also issued Circular No 143/13/2020 GST dated 10-11- 2020 clarifying the following issues relating to the Quarterly Return Monthly Payment scheme (hereinafter referred to as QRMP Scheme): Eligibility for the Scheme In terms of notification No. 84/2020- Central Tax, dated 10.11.2020, 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. It is clarified that 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. This new Scheme will be effective from 01.01.2021. Further, in case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter. Exercising option for QRMP Scheme Facility to avail the Scheme on the common portal would be available throughout the year. In terms of rule 61A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred as CGST Rules), 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. In order to exercise this option, the registered person must have furnished the last return, as due on the date of exercising such option. For example: A registered person intending to avail of the Scheme for the quarter July to September can exercise his option during 1st of May to 31st of July. If he is exercising his option on 27th 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 22/24th July. Registered persons are not required to exercise the option every quarter. 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 said option. For the first quarter of the Scheme i.e. for the quarter January, 2021 to March, 2021, in order to facilitate the taxpayers, it has been decided that all the registered persons, whose aggregate turnover for the FY 2019- 20 is up to 5 crore rupees and who have furnished the return in FORM GSTR-3B for the month of October, 2020 by 30 th November, 2020 , shall be migrated on the common portal as below. Therefore, taxpayers are advised to 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 30th November, 2020 will not be migrated to the Scheme. They will be able to opt for the Scheme once the FORM GSTR-3B as due on the date of exercising option has been filed. Sl.No. Class of registered person Default Option 1 Registered persons having aggregate turnover of up to 1.5 crore rupees who have furnished FORM GSTR- 1 on quarterly basis in the current financial year Quarterly return 2 Registered persons having aggregate turnover of up to 1.5 crore rupees who have furnished FORM GSTR- 1 on monthly basis in the current financial year Monthly Return 3 Registered persons having aggregate turnover more than 1.5 crore rupees and up to 5 crore rupees in the preceding financial year Quarterly return Above default option has been provided for the convenience of registered persons based on their anticipated behaviour. However, such registered persons are free to change the option as above, if they so desire, from 5th of December, 2020 to 31st of January, 2021. It is re-iterated that any taxpayer whose aggregate turnover has exceeded 5 crore rupees in the financial year 2020-21, shall opt out of the Scheme. Similarly, the facility for opting out of the Scheme for a quarter will be available from first day of second month of preceding quarter to the last day of the first month of the quarter. All persons who have obtained registration during any quarter or the registered persons opting out from paying tax under Section 10 of the CGST Act during any quarter shall be able to opt for the Scheme for the quarter for which the opting facility is available on the date of exercising option as in para 4.1. It is also clarified that such registered person, whose aggregate turnover crosses 5 crore rupees during a quarter in current financial year, shall opt for furnishing of return on a monthly basis, electronically, on the common portal, from the succeeding quarter. In other words, in case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter. It is further clarified that the option to avail the QRMP Scheme is GSTIN wise and therefore, 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. Furnishing of details of outward supplies under section 37 of the CGST Act. The registered persons opting for the Scheme would be required to furnish the details of outward supply in FORM GSTR-1 quarterly as per the rule 59 of the CGST Rule. For each of the first and second months of a quarter, such a registered person will have the facility (Invoice Furnishing Facility- IFF) to furnish the details of such outward supplies to a registered person, as he may consider necessary, between the 1st day of the succeeding month till the 13th day of the succeeding month. The said details of outward supplies shall, however, not exceed the value of fifty lakh rupees in each month. It may be noted that after 13th of the month, this facility for furnishing IFF for previous month would not be available. As a facilitation measure, continuous upload of invoices would also be provided for the registered persons wherein they can save the invoices in IFF from the 1st day of the month till 13th day of the succeeding month. 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. For example, a registered person who has availed the Scheme wants to declare two invoices out of the total ten invoices issued in the first month of quarter since the recipient of supplies covered by those two invoices desires to avail ITC in that month itself. Details of these two invoices may be furnished using IFF. The details of the remaining 8 invoices shall be furnished in FORM GSTR-1 of the said quarter. The two invoices furnished in IFF shall be reflected in FORM GSTR-2B of the concerned recipient of the first month of the quarter and remaining eight invoices furnished in FORM GSTR-1 shall be reflected in FORM GSTR-2B of the concerned recipient of the last month of the quarter. The said facility would however be available, say for the month of July, from 1st August till 13th August. Similarly, for the month of August, the said facility will be available from 1st September till 13th September. It is re-iterated that said facility is not mandatory and is only an optional facility made available to the registered persons under the QRMP Scheme. The details of invoices furnished using the said facility in the first two months are not required to be furnished again in FORM GSTR-1 . Accordingly, 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. At his option, 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. Monthly Payment of Tax The registered person under the QRMP Scheme would be required to pay the tax due in each of the first two months of the quarter by depositing the due amount in FORM GST PMT-06, by the twenty fifth day of the month succeeding such month. While generating the challan, taxpayers should select Monthly payment for quarterly taxpayer as reason for generating the challan. The said person can use any of the following two options provided below for monthly payment of tax during the first two months (a) 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 thirty five 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: i. 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 100 CGST 35 SGST 100 SGST 35 IGST 500 IGST 175 Cess 50 Cess 17.5 ii. In case the last return filed was monthly for tax period March, 2021: Tax paid in Cash in March, 2021 Tax required to be paid in each of the months April and May, 2021 CGST 50 CGST 50 SGST 50 SGST 50 IGST 80 IGST 80 Cess Cess 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 registered from the first day of the tax period till the last day of the tax period. (b) Self-Assessment 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 GSTR-2B, 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. Quarterly filing of FORM GSTR-3B Such registered persons would be required to furnish FORM GSTR-3B, for each quarter, on or before 22nd or 24th day of the month succeeding such quarter. In FORM GSTR-3B, they shall declare the supplies made during the quarter, ITC 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. However, any amount left after filing of that quarter s FORM GSTR-3B 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. Applicability of Interest For registered person making payment of tax by opting Fixed Sum Method i. 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 in para 6.1(a) 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. ii. 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. iii. 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. Illustration 1 A registered person, who has opted for the Scheme, had paid a total amount of ₹ 100/- in cash as tax liability in the previous quarter of October to December. He opts to pay tax under fixed sum method. He therefore pays ₹ 35/- each on 25th February and 25th March for discharging tax liability for the first two months of quarter viz. January and February. In his return for the quarter, it is found that liability, based on the outward and inward supplies, for January was ₹ 40/- and for February it was ₹ 42/-. No interest would be payable for the lesser amount of tax (i.e. ₹ 5 and ₹ 7 respectively) discharged in these two months provided that he discharges his entire liability for the quarter in the FORM GSTR-3B of the quarter by the due date. Illustration 2 A registered person, who has opted for the Scheme, had paid a total amount of ₹ 100/- in cash as tax liability in the previous quarter of October to December. He opts to pay tax under fixed sum method. He therefore pays ₹ 35/- each on 25th February and 25th March for discharging tax liability for the first two months of quarter viz. January and February. In his return for the quarter, it is found that total liability for the quarter net of available credit was ₹ 125 but he files the return on 30th April. Interest would be payable at applicable rate on ₹ 55 [₹ 125 ₹ 70 (deposit made in cash ledger in M1 and M2)] for the period between due date of quarterly GSTR 3B and 30th April For registered person making payment of tax by opting Self- Assessment Method: 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. Interest payable, if any, shall be paid through FORM GSTR-3B. Applicability of Late Fee 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 the applicable for delay in furnishing of the said quarterly return/details of outward supply. It is clarified that no late fee is applicable for delay in payment of tax in first two months of the quarter. The above Notifications and Circular are available on the CBIC website www.cbic.gov.in. All Trade Associations are requested to circulate the contents of this Trade Notice to their members, goods and service providers in particular and trade in general. (ARCHANA NAYAK) JOINT COMMISSIONER PCCO, CGST BENGALURU ZONE.