Quarterly Return Monthly Payment Scheme

quarterly return monthly payment system
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Quarterly Return Monthly Payment Scheme

Background

GST Council in its 42nd meeting held on 05.10.2020 recommended to allow taxpayers having turnover of up to Rs. 5 Crore to furnish return on Quarterly basis along with monthly payment of tax w.e.f. 01.01.2021.

It is similar to the pre-GST regime where the taxpayers were allowed to pay tax (Service Tax/ VAT) on a monthly basis and file return semi-annually. This recommendation was welcomed by the industry as the small taxpayers were finding it difficult to file returns on monthly basis.

Eligibility

Taxpayers having aggregate turnover of up to Rs. 5 Crores in the preceding Financial Year shall be eligible for this scheme w.e.f. 01.01.2021.

Aggregate turnover shall be auto-calculated on the GST portal on the basis of the information filed.

The moment the turnover in any quarter exceeds Rs. 5 Cr, the taxpayer will be ineligible for the scheme in the next quarter.

Invoice Furnishing Facility – IFF

As per Rule 59, Taxpayers opting for this scheme can file GSTR-1 on a Quarterly basis. This will result in the problem of claiming ITC as the Input was not appearing in GSTR-2A/ GSTR-2B in the month of which the invoice was issued.

To solve this problem, a new facility has been initiated named as Invoice Furnishing Facility – IFF. Under this facility, the taxpayer can furnish details of outward supplies made to registered persons between the 1st day to the 13th day of the next month.

The invoices uploaded by the seller during the period mentioned above will be reflected in GSTR-2A and GSTR-2B of the buyer/ recipient.

It is important to note that the invoices uploaded on monthly basis will not have to be uploaded in GSTR-1 filed at the end of the quarter.

Payment of Taxes (Monthly)

Fixed Sum Method

Under this method, the taxpayer has to pay an amount equal to 35% of tax paid in cash previous quarter (If return filed Quarterly) and an amount equal to the tax paid in cash in the month of the preceding quarter (If return filed Monthly).

⊗ Self- Assessment Method

Under this method, the taxpayer needs to calculate the Net Tax Liability (Outward Tax Liability – ITC) and pay the balance amount on monthly basis using Form GST PMT 06.

Late Payment Interest

No Interest shall be charged if the amount auto Calculated (refer above) is paid within Due Date (25th of next month) if the taxpayer is using Fixed Sum Method.

But if the taxpayer chooses Self- Assessment Method, then interest shall be charged @ 18% from the due date till the date of making payment on the amount which falls short paid.

Note: – If the amount is paid after the due date then interest shall be charged under both methods.

Due Date of GSTR-3B and GSTR-1

As per the scheme, GSTR-3B has to be filed on a quarterly basis.

As per the scheme, GSTR-1 has to be filed on a quarterly basis.

The due date of GSTR 1 will be the 13th of the Month Succeeding the Quarter. (For all the States & Union Territories)



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About CA Mehul Gupta 30 Articles
Chartered Accountant in practice, Certified GST Practitioner & Commerce Graduate. He is mainly engaged in the practice of Direct taxes, GST, International taxation, & assurance services. A visiting faculty in the Faridabad Branch of ICAI.

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