QRMP payment 35% challan not allowed
This query is : Resolved
07 February 2021
I am having turnover less than 1 crore. Always filled quarterly gstr1 return.
1. I have paid tax in cash in October
2. I have paid tax by using credit in my ledger for both November and December.
3. I still have credit in my electronic ledger, both cash and credit.
Now, I tried creating challan in QRMP, with 35% challan option.
But it gives me the message that "The cash paid for tax liability in last GSTR3B is NIL/less than minimum amount required for 35% challan creation. Hence you are advised to make payment on self assessment basis".
Why such message, I have not understood.
When I have paid cash tax in October, and offset my liability for Nov and December using my ledger balance, why am I not allowed 35 % challan route. Please note, I still have credit balance in my ledger.
Request for your guidance.
Regards,
1. I have paid tax in cash in October
2. I have paid tax by using credit in my ledger for both November and December.
3. I still have credit in my electronic ledger, both cash and credit.
Now, I tried creating challan in QRMP, with 35% challan option.
But it gives me the message that "The cash paid for tax liability in last GSTR3B is NIL/less than minimum amount required for 35% challan creation. Hence you are advised to make payment on self assessment basis".
Why such message, I have not understood.
When I have paid cash tax in October, and offset my liability for Nov and December using my ledger balance, why am I not allowed 35 % challan route. Please note, I still have credit balance in my ledger.
Request for your guidance.
Regards,
10 July 2024
It seems there might be a misunderstanding regarding the QRMP (Quarterly Return Monthly Payment) scheme and the utilization of credit in your electronic ledger for tax payments. Here’s a detailed explanation to clarify your situation:
### Understanding the QRMP Scheme and Challan Creation
1. **QRMP Scheme**: Under the QRMP scheme, taxpayers can opt to file GSTR-1 quarterly while paying taxes monthly through challans. There are two options for paying taxes monthly:
- 35% Challan: Paying an estimated 35% of the tax liability paid in the last quarter through a challan.
- Self-assessment Basis: Paying taxes based on self-assessment for the month.
2. **Utilization of Electronic Ledger**: Your tax payments and utilization from the electronic ledger (which includes both cash balance and credit balance from Input Tax Credit (ITC)) are crucial here.
### Possible Reasons for the Message Received
Based on the message you received, "The cash paid for tax liability in last GSTR3B is NIL/less than minimum amount required for 35% challan creation," it suggests that the system is not recognizing sufficient cash payment in the last GSTR-3B return for the previous quarter.
Possible scenarios to consider:
- **Insufficient Cash Payment**: If the system indicates "NIL" or less cash paid in the last GSTR-3B, it might imply that the cash component paid in the previous quarter's GSTR-3B was not adequate to meet the minimum required amount for 35% of the tax liability.
- **Credit Utilization**: While you have credit available in your electronic ledger, the QRMP scheme requires a minimum cash payment to be made each quarter. If your previous quarter's GSTR-3B did not have sufficient cash payment, it could lead to this message.
### Steps to Resolve the Issue
1. **Review Previous GSTR-3B**: Verify the cash amount paid in the previous quarter's GSTR-3B. Ensure that there was a substantial cash payment reflecting there.
2. **Minimum Cash Requirement**: Understand the minimum cash payment required as per the QRMP guidelines. This is typically 35% of the total tax liability paid in the last quarter through GSTR-3B.
3. **Utilization of Credit**: While you can use credit available in your electronic ledger, there should be a sufficient cash component paid as per the QRMP rules.
4. **System Error or Glitch**: If you believe there’s an error in the system’s message and you have indeed paid sufficient cash in the last GSTR-3B, you may need to reach out to GST helpdesk or consult with a GST practitioner to resolve this issue.
### Conclusion
Ensure you have paid a significant amount of tax in cash in your previous GSTR-3B to qualify for the 35% challan option under QRMP. If the system continues to show the message despite meeting the cash payment criteria, seeking assistance from GST support or a tax professional would be advisable to resolve this matter promptly.
### Understanding the QRMP Scheme and Challan Creation
1. **QRMP Scheme**: Under the QRMP scheme, taxpayers can opt to file GSTR-1 quarterly while paying taxes monthly through challans. There are two options for paying taxes monthly:
- 35% Challan: Paying an estimated 35% of the tax liability paid in the last quarter through a challan.
- Self-assessment Basis: Paying taxes based on self-assessment for the month.
2. **Utilization of Electronic Ledger**: Your tax payments and utilization from the electronic ledger (which includes both cash balance and credit balance from Input Tax Credit (ITC)) are crucial here.
### Possible Reasons for the Message Received
Based on the message you received, "The cash paid for tax liability in last GSTR3B is NIL/less than minimum amount required for 35% challan creation," it suggests that the system is not recognizing sufficient cash payment in the last GSTR-3B return for the previous quarter.
Possible scenarios to consider:
- **Insufficient Cash Payment**: If the system indicates "NIL" or less cash paid in the last GSTR-3B, it might imply that the cash component paid in the previous quarter's GSTR-3B was not adequate to meet the minimum required amount for 35% of the tax liability.
- **Credit Utilization**: While you have credit available in your electronic ledger, the QRMP scheme requires a minimum cash payment to be made each quarter. If your previous quarter's GSTR-3B did not have sufficient cash payment, it could lead to this message.
### Steps to Resolve the Issue
1. **Review Previous GSTR-3B**: Verify the cash amount paid in the previous quarter's GSTR-3B. Ensure that there was a substantial cash payment reflecting there.
2. **Minimum Cash Requirement**: Understand the minimum cash payment required as per the QRMP guidelines. This is typically 35% of the total tax liability paid in the last quarter through GSTR-3B.
3. **Utilization of Credit**: While you can use credit available in your electronic ledger, there should be a sufficient cash component paid as per the QRMP rules.
4. **System Error or Glitch**: If you believe there’s an error in the system’s message and you have indeed paid sufficient cash in the last GSTR-3B, you may need to reach out to GST helpdesk or consult with a GST practitioner to resolve this issue.
### Conclusion
Ensure you have paid a significant amount of tax in cash in your previous GSTR-3B to qualify for the 35% challan option under QRMP. If the system continues to show the message despite meeting the cash payment criteria, seeking assistance from GST support or a tax professional would be advisable to resolve this matter promptly.
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