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QRMP Scheme - Should we adopt or not?

CA Sapna Ghelani 
on 06 March 2021

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The topic of QRMP has been a lot in trend regarding whether this scheme is beneficial to the taxpayers or not. There has been a dilemma whether the small taxpayers were more satisfied with earlier compliances of GSTR 1/3B or with this new QRMP Scheme.

So, let us understand the whole scheme and then decide what should be done.

What is QRMP Scheme?

  • Quarterly Return Filing and Monthly Payment of Taxes (QRMP) is the scheme for small businesses that have an annual aggregate turnover of up to Rs 5 Crores, which enables them for GST Return Filing on a quarterly basis.
  • This facility can be availed throughout the year in any
  • If annual aggregate turnover crosses Rs.5 Crores,taxpayer will become ineligible for the scheme for the next quarter.
  • The Quarterly GSTR-3B filing option will be available from 1st January 2021 onwards. It is clarified that this scheme is optional and can be availed based on GSTIN.
QRMP Scheme - Should we adopt or not

Due dates for filing quarterly GSTR-3B

The due dates for filing quarterly GSTR-3B has been notified by CBIC, as follows:

Sr No

GST Registration in States and Union Territories

Due Date

1

Chhattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli, Daman and Diu, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh

22nd day of the month succeeding such quarter

2

Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Mizoram, Manipur, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha

24th day of the month succeeding such quarter

  • Due date of GSTR-1 - 13th of month succeeding such quarter.
  • Due date for payment of tax - is 25th of next month
  • Form No - GST PMT-06

Now let us understand in detail the advantages and disadvantages of using this scheme as well as the advantages and disadvantages of the facilities attached to the QRMP scheme.

 

Benefits of QRMP SCHEME

The scheme was mainly introduced to benefit the ease of conduct of business and help the taxpayers to reduce burden. The following are the pros of availing this scheme -

  • Compliances for the taxpayers will be reduced significantly
  • Taxpayers will be required to file Only Four GSTR-3B returns instead of twelve GSTR-3B returns in a year.
  • Also, taxpayers will be required to file Only Four GSTR-1 returns as Invoice Filing Facility (IFF) is provided under this scheme.

Issues under QRMP SCHEME

There is a lot of confusion amongst people regarding whether to opt for QRMP or to continue with monthly returns. So, some disadvantages of this scheme are listed below -

  • The taxpayers will always have to choose between two methods of tax payments every month i.e., Fixed Sum Method and Self-assessment method.
  • 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.
  • QRMP scheme is not available to every type of registered taxpayers. This scheme is available to those who have to file FORM GSTR-1 and FORM GSTR-3B. So, the taxpayers who are not required to file GSTR 1 and GSTR 3B will not get the benefit of this scheme.
  • As tax has to be deposited monthly, so time would be consumed for calculation of liability. It is just postponement of filling of the return and not the payment of tax

What is Invoice Furnishing Facility (IFF)

  • The registered persons who are opting for this scheme can furnish the details of outward supplies using this facility - Invoice Furnishing Facility (IFF)
  • The time period of using this facility is from the 1st day of month till 13th day of the said month. Like for example, you can furnish details of outward supply of March 2021 from 1st April - 13th April 2021
  • The details can be furnished cumulatively upto a value of Rs.50,00,000 in each month.
  • The details of outward supplies furnished using the facility of IFF shall not be furnished in Form GSTR-1 for the said quarter if it relates to first and second month.
  • The details will also be reflected in GSTR-2A and GSTR-2B of the recipient.

Advantages of IFF

The following are the advantages of Invoice Furnishing Facility:

  • There is no late fee for late uploading of B2B invoices i.e. even if invoices are uploaded beyond 13th of next month, no late fees will be chargeable.
  • IFF is not a mandatory facility. If it is chosen for the first month, and if discontinued for the second month of the same quarter, there is no issue. It is flexible in nature.
  • Buyers of goods can claim ITC every month from small taxpayers.
  • Small taxpayers provide faster ITC claims which can improve their business.
  • There will be ease of the compliance burden by reducing the volume of invoices to be uploaded at the end of the quarter.

Disadvantages of IFF

  • The registered buyers may lose the input tax credit for that month if uploading invoices gets deferred to the next month.
  • There would be an increase in compliance cost due to filing of monthly details.
  • Opting for IFF would be not be beneficial for the registered persons who have a small volume of B2B transactions
  • Although it says that no additional compliance burden is required but indirectly it has become Monthly Compulsory compliance for many.
  • Another major problem is the total value of invoices is restricted to Rs.50 lakhs per month. There are chances where in month there are no sales and then in another there are sales of more than Rs.50 lacs. How should this be dealt with?
 

Monthly Payments through PMT-06

Although the filing of return is made quarterly but the payment of tax, interest, late fee and penalty is to be done monthly through GST PMT-06 Challan. Form PMT-06 Challan gained more significance from January 2021 with QRMP scheme being introduced. There are two methods of computing tax liability under QRMP scheme- Fixed Sum method and Self-assessment method. For making payments using either of the methods, form PMT-06 challan is used.

Advantages of using PMT-06

  • Using PMT-06, there would be no more queues for making payments as there would be online payments.
  • There is a benefit that even GST practitioners can make payments on behalf of their clients.
  • If online payments are made using this challan after 8 p.m. then it is credited to the electronic cash ledger of the taxpayer on the same day.
 

Disadvantages of using PMT-06

  • Calculation of tax using different methods is bringing very much confusion for taxpayers.
  • Biasedness is being considered for those who are paying tax under self-assessment method. This is because there is no relaxation in payment of interest when one chooses self-assessment method. How would this make a difference for the payers who are making payment in monthly system or QRMP scheme?
  • There is no solution to a problem if taxpayers opting for monthly system wrongly chooses monthly payment for quarterly return or vice-versa.

Now, the main concern is whether this QRMP scheme consisting the facilities of IFF and PMT-06 is beneficial to the taxpayers or not. Seeing all the advantages and disadvantages of scheme as well as the facilities, what are your thoughts regarding this?


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