Payment of Tax by Fixed Sum Method under the QRMP Scheme

The Goods and Services Tax Network (GSTN) has issued an advisory on February 03, 2021, related to Payment of Tax by Fixed Sum Method under QRMP Scheme. With this announcement, GSTN announced that taxpayers who are under the Quarterly Returns and Monthly Payment of Tax (QRMP) scheme. will have the following two options for tax payment for the first two months of a quarter :

Fixed Sum Method
Self-Assessment Method

The current article briefs Payment of Tax by Fixed Sum Method under the QRMP Scheme.

Synopsis of Notification

With effect from 1st January 2021, the above-mentioned options will be available to the Taxpayers who are under Quarterly Returns and Monthly Payment of Tax (QRMP) Scheme for tax payment for the first 02 months of a quarter:

Fixed Sum Method - In this method, the portal can generate a pre-filled challan in Form GST PMT-06 based on his record.
Self-Assessment Method - For Self –Assessment Method, the Tax due is to be paid on actual supplies after deducting the Input Tax Credit available.

Quarterly Returns and Monthly Payment of Tax (QRMP) scheme Before knowing more about those two payment methods are, let us first understand what the Quarterly Returns and Monthly Payment of Tax (QRMP) scheme is. As a trade facilitation measure and to further ease the process of doing business the Goods and Service Tax Council in its 42nd meeting held on 05.10.2020, had announced that registered person having aggregate turnover of Rs.5 crore rupees will be allowed to furnish return every quarter along with monthly payment of tax, with effect from 01.01.2021 by opting Quarterly Return filing and Monthly Payment of Taxes (QRMP) Scheme. A registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of Rs. 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme. It is clarified that the aggregate annual turnover for the preceding fiscal year will be calculated in the common portal considering the details furnished in the returns by the taxpayer for the tax periods in the preceding fiscal year. Know more about Salient Features of the QRMP Scheme

QRMP Benefits to businesses

The benefits of Quarterly Return filing and Monthly Payment of Taxes (QRMP) Scheme is as follows:

Under this scheme, the businesses need to file returns every quarter along with monthly payment of tax. This would help them file only 8 returns (4 quarters of GSTR 1 and GSTR 3B) in a year as compared to the earlier filing of 16 returns per year.
Apart from reducing the effort of filing returns 16 times a year, QRMP helps small businesses avail themselves their eligible tax credits which they have been losing out to compliance Rule 36(4), where their suppliers are filing GSTR 1 quarterly.
With the introduction of the QRMP scheme, the invoice furnishing facility (IFF)helps the taxpayers to file returns (GSTR 1 and GSTR 3B)every quarter and simultaneously upload invoices on monthly basis. This would enable them to avail the input credit timely, as the uploaded invoices will be reflected in the GSTR-2A and GSTR-2B.

As per the QRMP scheme, the person having an aggregate turnover of up to 5 crore rupees may be allowed to furnish a return every quarter

Eligible Person for the QRMP scheme

Following registered person can file quarterly returns and pay tax every month:

- A Registered Person who is required to file GSTR 3B with Aggregate Annual Turnover (AATO) of up to Rs.5 Crore in the previous fiscal year is eligible under this scheme. If AATO crosses Rs 5 Cr. during a quarter, the Registered Person will become ineligible for the Scheme from next quarter.
- Any person obtaining the new GST registration or opting out of the GST Composition Scheme can also opt for the Quarterly Return filing and Monthly Payment of Taxes (QRMP) Scheme.
- The option to avail of the QRMP Scheme can be availed in GSTIN or Goods and Services Tax Identification Number (GSTIN) wise. Therefore, few GSTINs for that PAN can opt for this Scheme, and remaining GSTINs can remain out of the Scheme

Fixed Sum Method and Self-Assessment Method

According to this update from the GSTN, in the self-assessment method, businesses pay the tax which is due on the actual supplies, after deducting the input tax credit available, whereas, in the fixed sum method, a pre-filled challan in Form GST PMT-06 is generated in the portal based on his record. In the fixed sum method, the challan amount is calculated based on whether GSTR-3B is furnished quarterly or monthly basis.

• If GSTR-3B is furnished quarterly, 35% of the amount paid as tax from Electronic Cash Ledger in the preceding quarter GSTR-3B will be auto-populated in the challan.
• If GSTR-3B is furnished on monthly basis, 100% of the amount paid as tax from Electronic Cash Ledger in their GSTR-3B for the last month of the preceding quarter will be auto-populated in the challan.

Form GST PMT-06is the challan format which is generated for payment of tax under GST. A challan generated under GST PMT-06 is mandatory for all such tax payments made through net banking/OTC, where available Input Tax Credit is not availed.

Other Announcement for Taxpayers

The above-mentioned pattern will be applicable only from April 2021 onwards. Since all the taxpayers were filing GSTR-3B on monthly basis till December 2020,
The auto-populated challan for January 2021 and February 2021 will have 100% of the tax liability discharged from the Electronic Cash Ledger for December 2020.
In case the balance in the Electronic Cash Ledger or Electronic Credit Ledger is sufficient for the tax due for the first and second months of the quarter or if there is no tax liability, the taxpayers are not required to deposit any amount for the first two months of the quarter.

Click here to know more about the official announcement of Payment of Tax by Fixed Sum Method under QRMP Scheme

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