Currently the periodicity of filing GSTR-3B return along with payment of GST is monthly. Under QRMP Scheme, in order to facilitate small tax payers they will be allowed to file GSTR-3B return on quarterly basis, however payment of GST will be required to be made on monthly basis.
This new Scheme will be effective from 01.01.2021 and it is an optional scheme. The eligible tax payers can opt for the scheme or may also not opt it and continue with the normal monthly filing of GSTR-3B.
In this article we shall discuss about the benefits of opting for QRMP Scheme and our comments on whether taxpayers should choose QRMP Scheme or not.
As per handout issued by CBIC certain benefits have been stated towards opting of QRMP Scheme. The contents of the handout are reproduced below:
Also Read: FAQs on quarterly filing of GSTR-3B and monthly payment of tax (QRMP Scheme)
Benefits of opting for QRMP Scheme
Taxpayers with annual turnover upto Rs 1.5 Crore and filing GSTR-1 on monthly basis presently have not been migrated to QRMP scheme. They can opt in for this scheme and avail the following benefits of this scheme:
> File GST Statements/Returns In FORM GSTR-1 & GSTR-38 just once in a Quarter
> Pay monthly tax conveniently using Fixed Sum Method (Pre-filled Challan) or Self-Assessment Method (actual tax due after adjusting ITC) in first two months of a Quarter
> Easily opt in and opt out of the Scheme
The choice to opt in and opt out of the scheme can be exercised by the taxpayer throughout the year at the common portal
> Enjoy the convenience of a Flexible Invoice Filing Facility
You can upload and file selected B2B invoices In first two months of a quarter to enable flow of ITC to the recipients. The remaining invoices can be reported/filed In quarterly FORM GSTR-1
> Self assessment of ITC & Tax once every Quarter
Reduce your compliance cost significantly by assessing tax liability & ITC admissibility on quarterly basis Instead of monthly basis.
Our Comments on opting for QRMP Scheme
In our view the QRMP Scheme is nothing more than an eyewash as payment of taxes is still to be made on monthly basis and only GSTR-3B is to be filed on quarterly basis. It may be noted that the scheme prescribes that the monthly deposit under scheme cannot be used by the taxpayer for any other purpose till the filing of return for the quarter, thus the amount deposited is the first two months of a quarter will be blocked till filing of GSTR-3B for said quarter. For us real benefit would have devolved upon taxpayers in case the payment was also shifted from monthly to quarterly basis.
The only benefit of QRMP Scheme we may see is that payment of taxes in first two months of the quarter can be made by 25th of next month as against 22nd / 24th of the next month in case monthly GSTR-3B is being filed. Though this gives one to three days additional time for payment of tax , it may also pose a challenge as due to different due dates, same may be missed by taxpayers, inviting levy of late fee and / or interest.
It is further important to note that interest will be applicable in cases of shortfall in monthly payment of taxes under ‘self assessment method‘, although no interest applies in case payment is made under ‘fixed sum method‘ provided timely compliances are made.
Further in era of auto-population of GSTR-3B the introduction of quarterly filing of GSTR-3B with monthly payment doesn’t make sense.
In our view the Taxpayers should not immediately jump on the bandwagon and rather cautiously take call about opting for QRMP Scheme. In case they are in position to compute the exact tax liability every month after ITC reconciliation with GSTR-2B and after applying ITC restriction under Rule 36(4) they can continue with monthly filing of GSTR-3B.
However in case they have difficulty in this process each month they can go for QRMP Scheme and opt ‘fixed sum method’ for payment of taxes in first two months of the quarter and carry out such reconciliation for all three months while filing quarterly GSTR-3B.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
