QRMP scheme which is a step towards the goal of increasing the “Ease of doing business” and providing relief to small taxpayers

GST council in its 42nd GST council meeting proposed a quarterly return filing system for small taxpayers to be implemented from 01st January 2021.

To start with, what is the QRMP scheme? In simple terms, it is an option to file the quarterly return with a monthly tax payment.

Who can take the benefit of this scheme?

Small scale businesses having aggregate turnover up to Rs. 5 cr in the preceding financial year can take the benefit of this scheme.

What is the benefit of this scheme, why the government has introduced this scheme?

Firstly, the small taxpayers would only need to file 8 returns (4 GSTR 1 and 4 GSTR 3B) in a year as compared to the 16 returns a year, at present.

Secondly, This scheme would bring in a big relief to those taxpayers who might have been losing their eligible credits due to compliance with Rule 36(4) where their suppliers are filing GSTR 1 quarterly.

There is a condition to opt for this scheme, that is, a taxpayer has to furnish all the Returns for the preceding month as on the date of exercising the option.

Once the option is exercised, it will continue to remain until it is changed, or the taxpayer becomes ineligible for the scheme. It means once the taxpayer has crossed the turnover of Rs. 5 Cr in the existing financial year, he will become ineligible for the scheme.

To calculate the turnover of Rs. 5 Cr, we need to consider the aggregate turnover PAN wise. That is if the company is having 4 branches under the same PAN, the turnover of all the branches needs to be considered.

But the option can be exercised GSTIN wise. Suppose out of the 4 branches, 2 branches want to exercise this option and 2 branches don’t want to, then it can be exercised accordingly.

Now, the question is, that if we need to file GSTR-1 quarterly, then how will a customer be able to take the credit monthly?

With the introduction of the QRMP scheme, there is a facility to of IFF i.e. Invoice Furnishing Facility by which a taxpayer can upload the details of outward supply on monthly basis.

For each of the first and second month of a quarter, such a registered person will have the 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 Rs. 50 Lakhs in each month. It may be noted that after the 13th of the month, this facility for furnishing IFF for the previous month would not be available.

Now, how do you make the monthly payment of tax if the return needs to be filed quarterly?

RPs (Registered Persons) need to pay the tax due in each of the first two months by 25th of the following month of the Quarter by depositing the due amount in FORM GST PMT-06, by selecting “Monthly payment for the quarterly taxpayer” as a reason for generating Challan
RPs can either use the Fixed Sum Method (pre-filled challan) or the Self-Assessment Method (actual tax due), for a monthly payment of tax for the first two months, after adjusting ITC.
RP’s are free to avail of any of the above methods for payment in any of the two months of the quarter.

There are two methods of payment of tax. One is the Fixed sum method and the second is the self-assessment method.

Under the Fixed sum method, a taxpayer can pay 35% if the quarterly return had been filed in the previous quarter or 100% of the previous month if the monthly return is filed for the previous quarter.

The self-assessment method is where the manual computation of tax to be paid in cash after adjusting the available ITC in the electronic credit ledger.

GSTR-3B needs to be a file on a quarterly basis on or before the 22nd or 24th day of the succeeding month.