Should GST Taxpayers opt for QRMP Scheme from 1 Jan 2020? Know Pros & Cons
Quarterly Return Monthly Payment Scheme or QRMP as it is called is a recently introduced initiative by the Government in its initiative to simplify compliance for taxpayers. The Central Board of Direct Taxes (CBDT) issued notification 82/2020, 83/2020, 84,2020 and 85/2020 Central Tax dated 10-11-2020 and Circular 143/2020 on 10th November, to allow certain taxpayers to furnish their GST returns on a quarterly basis along with monthly payment of tax under QRMP Scheme, with effect from 1st January, 2021, i.e. from last quarter of FY 2020-21.
What is the Quarterly Returns with Monthly Payment (QRMP) Scheme?
Quarterly Returns with Monthly Payment (QRMP) Scheme is for eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on quarterly basis, while paying their tax dues on monthly basis through a challan.
Who all are eligible for the QRMP scheme?
- All taxpayers whose aggregate annual turnover (PAN based) is up to Rs. 5 Crore in the current financial year and the preceding financial year (if applicable) and have already filed their last due Form GSTR-3B return, are eligible for the QRMP scheme.
- If your aggregate turnover (PAN based) for FY 2019-20 and current Financial year is up to Rs. 5 Crore and you have filed your FORM GSTR-3B for the month of October 2020 (at least) by 30th November 2020, you will be put under QRMP scheme by default, by the GST system.
- If you wish to remain in the scheme, then you may not take any action and file your returns by the due date in April 2021.
- However, if you wish to exit the scheme you may do so by 31st January 2021.
Pros of Opting the QRMP scheme
- Lesser Compliance- The roll-out of the GST in India was followed by the beginning of online GST Registration and e-filing of GST Return filing. GST has a number of returns to be filed monthly, quarterly or annually. It sometimes gets very difficult to keep a track of all the returns to be filed. Reducing return filing frequency from monthly basis to quarterly basis, will save a lot of time and energy of the taxpayers.
- It is very simple to avail this scheme. Taxpayers can opt in (avail) the scheme and opt out (exit) if they don’t wish to continue quarterly filing by navigating to Login-> Services -> Returns -> Opt-in for quarterly return
- Once opted in, the scheme will continue for the taxpayer, unless they decide to exit or opt out. Hence, there is no issue of registering it every quarter to avail the benefit of this scheme.
- This scheme can be opted for different frequencies in different states. For instance, if a taxpayer has multiple GSTINs on the same PAN in different States, they can opt in for different frequencies (monthly or quarterly) in different States.
- There is no late fee for delayed payment of tax for any of the first two months
- One has ample time to opt in for this Scheme. You can opt in or opt out of the scheme as follows:
|Q1 (April –May – June)||1st February to 30th April|
|Q2 (July – August – September)||1st May to 31st July|
|Q3 (October – November – December)||1st August to 31st October|
|Q4 (January – February – March)||1st November to 31st January|
- GSTR-2A and GSTR-2B will be continued to be made available every month. A GSTR-2B’s quarterly view will also be made available. This will be made available under the return tab for the third month of the quarter. However, there will be no quarterly view of GSTR-2A.
- An additional optional facility has been provided to taxpayers to file their invoices in month M1 and M2. The facility will be similar to FORM GSTR-1 but will allow filing for only B2B invoices, credit notes, debit notes etc.
- One can file quarterly Nil return through SMS. Quarterly taxpayers may send the following SMS to 14409 to file a Nil GSTR-1 or Nil FORM GSTR-3B
- NIL 3B GSTIN MMYYYY
- NIL R1 GSTIN MMYYYY
- MM should be the last month of the quarter for which the return is being filed. For example, for the month of June 2020, taxpayer shall send NIL 3B XXXXXXXXXXXXXXX 062020 to 14409.
Cons of Opting the QRMP scheme
- This scheme is not available to all types of registered taxpayers. This scheme is available only to those who are liable to file FORM GSTR-1 and FORM GSTR-3B returns. Therefore, taxpayers who are not required to file GSTR 1 and GSTR 3B will not be able to avail the benefit of this scheme.
- Taxpayers whose turnover exceeds Rs. 5 crore will also not be able to avail this scheme. So large taxpayers will have to file the returns as before, on a monthly basis.
- System defaulting – If any taxpayer’s aggregate turnover for FY 2019-20 is up to Rs. 5 Crore and they have filed their FORM GSTR3B for the month of October 2020 by 30th November 2020, they may be added to the scheme by the system on default. If you wish to remain in the scheme, then you may not take any action and file your returns by the due date in April 2021. However, if you wish to exit the scheme you may do so by 31st January 2021.
- Payment of tax is sometimes based on previous returns. One has an option to either self-assess your liability or pay 35% of cash liability paid in the FORM GSTR-3B for the last quarter (in case of where GSTR 3B was filed quarterly) or 100% of the cash liability paid in the FORM GSTR-3B for the last month (in case where FORM GSTR-3B was filed monthly) through a challan. So, if your previous month/quarter liability was higher, your current liability will also be higher (irrespective of actual liability), if the same is not computed on self-assessment basis.
- Cash deposited in the first month against your liability for the first month cannot be considered for balance for your electronic cash ledger for the second month. The action to be taken in the second month should be considered based on the balance in cash ledger after the deposit made for the first month.
- One cannot utilize amount deposited in month M1 and M2 for any other purpose, before filing FORM GSTR-3B for the quarter in which such deposits have been made. After filing FORM GSTR-3B, such cash may be used for other purposes also
So, QRPM is the scheme for small businesses that have an annual aggregated turnover of up to INR 5 Crores, which enables them to GST Return Filing on a quarterly basis, however, the tax payment will still remain to be a monthly activity This form for opting in the scheme shall be made available from the 5th of December 2020.