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Analysis of Quarterly Return and Monthly Payment Scheme under GST

Heet Shah 
on 06 December 2020

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CBIC has come up with a new scheme for small taxpayers having an aggregate turnover of up to 5 crores. This scheme will allow small taxpayers to file their returns on a quarterly basis and make their payments on a monthly basis. This scheme has an objective to ease the tax compliance for the small taxpayers. We will try to analyze the notification issued by the department from this perspective.

Applicability and Eligibility

This scheme is applicable from 1.01.2021 for the registered person having an aggregate turnover of Rs. 5 Cr. Hence once the threshold of 5 Cr is crossed the registered person becomes ineligible for this scheme from the next quarter. Also, the return filing before applying for this scheme shall be duly complied with.

Exercising the Scheme

A taxpayer may choose this scheme even anytime if it fulfills the eligibility criteria. As per Rule 61A Portal will provide an option to opt under this scheme from the 1st day of the 2nd Month of Prev. Quarter to the Last day of 1st month of the quarter. Also, the taxpayer need not register for this scheme every quarter even unless he wants to opt-out from the scheme or becomes ineligible.

*QRMP Scheme from Apr’21 to Jun’21 Exercise Period: 1st Feb 20 to 31st Apr’21

Note: In Order to apply for these on 31st Apr’21 the taxpayer should have filed the return for the period before Mar’21 which remains due on 22nd/24th April.

(QRMP Scheme being relaxation would be by default allowed to the taxpayers based on the past trend i.e. taxpayers having aggregate turnover less than 5 cr. will be allowed these scheme by default except for the taxpayers filing the monthly return).

Further One shall opt-out from the next quarter once it crosses the threshold limits.

Furnishing GSTR-1 under QRMP Scheme

The Taxpayer will have an option to furnish an Invoice up to 50 Lakh per month through an Invoice Furnishing Facility (IFF) between the 1st to 13th of the succeeding month So the same gets reflected in GSTR-2A/2B of the recipient. After 13 the said facility would not be available Therefore the taxpayer will be required to file GSTR-1 to make available the ITC to the recipient.

The Taxpayer may also file GSTR-1 directly for the whole Quarter

Analysis of Quarterly Return and Monthly Payment Scheme under GST

Payments under the QRMP Scheme

Payments are required to be made on the 25th day of the succeeding month in Form GST PMT-06. It provides an option to pay a fixed sum or a self-assessed tax.

Under Fixed Sum Method taxpayers will be required to pay 35% of Tax paid in Cash in prev. quarter or cash paid in the last month of prev. quarter. This facility of the fixed sum would be available only if the taxpayer is registered from 1st day of the Tax period only. Therefore the taxpayer availing this scheme from the 1st Month of the Quarter would not be eligible for this option. Under the Self Assessed Tax method taxpayer will pay tax considering the inward and Outward during the month.

In case any refund arises due to excess payment in the 1st two months, the same shall be permitted only after filing of GSTR-3B for the Quarter, and the excess amount not be utilized for any other purpose.

Furnishing GSTR-3B under QRMP Scheme

Furnishing GSTR-3B on 22nd/24th of succeeding month of quarter-end. GSTR- 3B is mandatory even in case of cancellation of GST Registration within 1st two months of the quarter.

Interest Liability under the QRMP Scheme

The taxpayer shall discharge his tax liability by timely filing GSTR-3B or else an interest would be liable on the difference between the tax payable and paid from the date of furnishing of FORM GST PMT-06 till the date of such payment

Late Fee Liability under the QRMP Scheme

No late fees for delay in tax for the 1st two months. However late fees would be applicable for Quarterly filing Returns (GSTR-1 and GSTR-3B).

 

Conclusion

I doubt this scheme would provide relaxation to the taxpayers on compliance part looking at the current infrastructure of the portal even the doubt arises on its implementation. However, it will definitely give some relaxation to the small scale business. Further the same is made available on the GST Portal from 4 Dec 2020.

 

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