Analysis based on the practical experience faced by the taxpayers who have opted for the QRMP scheme introduced by the Government. Considering the nitigrities expected from the taxpayer by the scheme I have listed down a few points “Why you should opt-out of the QRMP scheme? “
QRMP scheme was promoted by the Government stating that it will reduce the compliance burden for the taxpayers whose annual aggregate turnover is up to Rs 5 crores in the preceding financial year.
But the fact is…
A taxpayer who has opted for the QRMP scheme is still filing details of outward supplies every month just that the name of the form has changed from Form GSTR 1 to Invoice Furnishing Facility.
A taxpayer who has opted for the QRMP scheme is still making the payment of tax every month just that the way of making payment has changed earlier it was through an auto-generated challan while furnishing Form GSTR 3B and now it is in Form GST PMT-06.
Read here>> How to opt-out of the QRMP Scheme?
Reasons why it is advisable to not opt for QRMP
⊗ Outward Supplies
Segregation and maintenance of records relating to outward supplies are of utmost importance for a QRMP taxpayer. As QRMP taxpayer is required to furnish specific details through Invoice Furnishing Facility and remaining details while furnishing Form GSTR 1.
Invoice Furnishing Facility
- If you are into seasonal business, you will have a tough time as IFF will not permit entries for more than Rs 50 lakhs in a month.
- If for a month you have B2B supplies amounting to more than Rs 50 lakhs, you will be left in dilemma which B2B supplies should be uploaded through IFF and which should be reported in Form GSTR 1.
Form GSTR 1
Following details are required to be furnished in Form GSTR 1 of the quarter
- Details of all outward supplies for the last month of the quarter.
- Details of B2C supplies of the first and second month of the quarter that includes export supplies and supplies that attract a reverse charge.
- Details of those B2B supplies which relate to the first & second month of the quarter but were not uploaded due to limit of Rs 50 Lakhs was exhausted or time period to furnish the same elapsed or any other reason.
Note: The details of outward supplies furnished through IFF do not auto-populate in Form GSTR 1 of the quarter. But if you try to provide the same details while furnishing Form GSTR 1 which was furnished through IFF, then an error message will pop up” Already feeded”. But when all the details are not available on the same page/form it is likely to become a cumbersome and time-consuming process to verify whether all the details of outward supplies were furnished through IFF+ Form GSTR 1.
⊗ Inward Supplies
- All the taxpayers are at mercy of the credit reflecting in Form GSTR 2B. A taxpayer will end up paying interest for a full month in case if the supplier furnishes the return after the due date for furnishing Form GSTR 1 & Invoice Furnishing Facility.
⊗ Payment of Tax
- Payment of tax has become complicated for every taxpayer after the QRMP scheme is introduced. While generating challan in Form PMT 06 every taxpayer is being asked the reason for the generation of challan. If any other taxpayer (other than the taxpayer who has opted for the QRMP scheme) selects the reason “monthly payment for quarterly return”. GSTN portal identifies the type of taxpayer based on the GSTIN and alerts the taxpayer that “this facility of payment is not applicable to you “. Ideally, the system should identify the taxpayer based on GSTIN and not give an option to select the reason for payment in the first place. In my opinion, only the taxpayers who have opted for the QRMP scheme should be asked to select the reason for generating the challan.
- For making the payment of tax in Form PMT 06 in the first and second month of the quarter, the taxpayer will be going through all the calculations required for payment of tax in Form GSTR 3B i.e. analyzing the total liability, total ITC as per Form GSTR 2B, total balance available in electronic cash & credit ledger.
- There is no recourse provided by the Government if the taxpayer selects an incorrect reason and/or an incorrect method of paying tax.
⊗ Refund of Tax
- A taxpayer can file an application for a refund only after Form GSTR 3B is furnished. QRMP taxpayers have to furnish a quarterly return in Form GSTR 3B. In that case, an exporter or taxpayer who has to apply for a refund due to the inverted duty structure will have to wait for the quarter to end for furnishing Form GSTR 3B and then make an application for a refund.