After much trials and error, CBIC has introduced fairly convenient system to simplify compliance for small taxpayers whose turnover is less than Rs.5 crores. The scheme called Quarterly Return Filing and Monthly Payment of Taxes (QRMP) allows the taxpayers to file GSTR-3B on a quarterly basis and pay tax every month.
Eligibility
A registered person who has an aggregate turnover of up to Rs. 5 crores in the preceding financial year.
In case the total turnover surpasses Rs. 5 crores during any quarter in the current financial year, the registered person shall not be eligible for the scheme from the next quarter.
This scheme is optional and can be availed separately for each GSTIN.
How to opt for QRMP scheme?
A registered person can opt to file GSTR-3B quarterly by indicating the same on GST portal. The option to opt QRMP for each quarter shall be available from the 1st of the second month of the preceding quarter until the last day of the first month of the quarter for which such option is being exercised. In simple words, QRMP scheme for July-Sept’21 quarter can be opted between 1st May’21 to 31st July’21.
The system allows the taxpayer to opt for QRMP scheme only if the last applicable return in FORM GSTR-3B, whose due date is over, is filed.
Monthly tax payments
Taxpayer has to deposit tax by the 25th of the following month, for the first and second months of the quarter. There are two methods of tax computation –
- Fixed Sum Method (FSM) (35% challan method): In fixed sum method, the taxpayer is required to pay a system generated challan in the first two months of a quarter.
- Self-Assessment Method (SAM): This is the existing method where a taxpayer can pay the tax liability by considering the tax liability on inward and outward supplies and the input tax credit available.
Submission of details of outward supplies
Taxpayers opting for QRMP scheme have to mandatorily submit invoice-wise details in GSTR-1 on quarterly intervals.
However, taxpayers who intend to pass ITC to their recipients in first two months of the quarter may upload details of B2B sales through IFF. Invoice Furnishing Facility (IFF) is an optional facility. Supplies made to unregistered persons (also called B2C supplies) are not required to be declared in IFF.
It is advisable for micro and small enterprises and startups to opt for QRMP scheme. However, selection of method of tax computation for monthly tax payment and use of IFF will depend on type of business and nature of transactions.
We hope this article will help entrepreneurs to enhance their tax literacy which is an essential element of financial literacy. For deeper discussion or queries, feel free to reach us at cakevalm@gmail.com.
GST Clinic is a modest initiative by Bhaskara Consulting Group to help entrepreneurs get practical understanding of GST law and its impact on business processes.