Navigating Tax Payments within the QRMP Scheme

The Central Board of Indirect Taxes and Customs (CBIC) launched the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme on January 1, 2021, to ease the compliance load on small taxpayers. This article details the procedure for making tax payments during the initial two months of each quarter for those taxpayers who file GSTR-3B quarterly.

Recent Updates Regarding the QRMP Scheme under GST

August 26, 2021

Starting September 1, 2021, taxpayers cannot submit GSTR-1 or utilize the Invoice Furnishing Facility (IFF) for August 2021 on the GST portal if their GSTR-3B filings are pending. This rule applies if GSTR-3B is overdue for the past two months up to July 2021 (for monthly filers) or for the last quarter ending June 30, 2021 (for quarterly filers), as per CGST Rule 59(6).

May 28, 2021

The 43rd GST Council meeting announced the following provisions:

• The deadline for furnishing B2B supplies via the IFF (an optional facility for QRMP scheme taxpayers) for May 2021 was extended from June 13 to June 28, 2021.
• Interest relief was provided for delayed submission of PMT-06 for April 2021 and May 2021:
  • For April 2021, no interest was charged for delays up to June 9. A reduced interest rate of 9% was applied for delays between June 10 and July 9, and the standard 18% interest rate applied thereafter.
  • For May 2021, no interest was charged for delays up to July 10. A reduced interest rate of 9% was applied for delays between July 11 and July 25, and the standard 18% interest rate applied thereafter.
• Quarterly GSTR-3B filings for January-March 2021 also received interest and late fee relief, as detailed here.

May 1, 2021

The deadline for furnishing B2B supplies through the IFF for April 2021 was extended from May 13 to May 28, 2021.

Understanding the QRMP Scheme

Taxpayers whose total yearly turnover was up to Rs. 5 crore in the previous fiscal year are eligible to enroll in the QRMP scheme. This initiative enables them to submit GSTR-3B returns every quarter, while tax payments are made monthly. Consequently, small taxpayers complete only eight regular returns annually (four GSTR-1 and four GSTR-3B), a significant reduction from the previous 16 returns (four GSTR-1 and twelve GSTR-3B).

Under the QRMP scheme, an Invoice Furnishing Facility (IFF) is available, allowing taxpayers to upload their sales invoices monthly on the GST portal, even if GSTR-1 is filed quarterly. These invoices are then reflected in the GSTR-2A and GSTR-2B of their GST-registered buyers, facilitating timely input tax credit (ITC) utilization. This mechanism helps buyers claim eligible input credits promptly, preventing potential business losses for sellers.

Tax Payment Due Dates Under the QRMP Scheme

All registered individuals participating in the QRMP scheme must remit their tax liabilities for the first two months of each quarter by the 25th of the subsequent month. For instance, the tax due for February 2021 (the second month of the quarter) should be paid by March 25, 2021.

Taxpayers are required to deposit their taxes using Form GST PMT-06. Payments can be made using either the fixed sum method or the self-assessment method, both of which are explained further in this document.

Conversely, the tax payment for the third month of the quarter is due by the 22nd or 24th of the month following the quarter and must be settled concurrently with the GSTR-3B filing.

Payment Methods Under the QRMP Scheme

Registered individuals can choose between two methods for making tax payments during the first two months of a quarter:

• Fixed Sum Method: Under this approach, taxpayers pay a pre-determined amount of tax, which is reflected in a pre-filled challan in Form GST PMT-06. This amount is equivalent to 35% of the cash tax paid in the previous quarter.

  For example:

  Tax paid in Quarter Jan-Mar’21	Tax to be paid in each month, for Apr’21 and May‘21
  CGST: 100	CGST: 35
  SGST: 100	SGST: 35
  IGST: 200	IGST: 70

  However, if a taxpayer filed monthly returns before opting into the QRMP scheme for the April-June quarter, they can choose to pay an amount equal to the tax paid in the final month of the preceding quarter.

  Tax paid for Mar’21 monthly return period	Tax to be paid in each month, for Apr’21 and May‘21
  CGST: 100	CGST: 100
  SGST: 100	SGST: 100
  IGST: 200	IGST: 200

• Self-Assessment Method (Actual Tax Due): With this method, taxpayers calculate their actual tax liability on outward supplies after deducting available input tax credit. They then manually determine the tax amount and deposit it using Form GST PMT-06. Taxpayers can refer to Form GSTR-2B to ascertain the eligible ITC.

Important Considerations:

• Any amount deposited by the taxpayer for the first two months of the quarter can only be used to offset the liability in that quarter’s Form GSTR-3B. Any surplus amount remaining after filing GSTR-3B for that quarter may either be refunded or carried forward for use in subsequent quarters.
• If a taxpayer's registration is cancelled during any of the first two months of a quarter, they are still required to furnish their Form GSTR-3B for that relevant tax period.

Interest Applicability Under the QRMP Scheme

Interest may be levied under the QRMP scheme in the following scenarios:

• Failure to Pay in Form GST PMT-06: If payment is not made by the due date, interest accrues from the due date of furnishing Form GST PMT-06 until the actual payment date.
• Non-filing of Form GSTR-3B: If the GSTR-3B return is not submitted by its due date, interest will be charged according to Section 50 of the Central Goods and Services Tax (CGST) Act on the net tax liability, after accounting for ITC.

For example:

• The tax due for the first month is not paid by the 25th of the following month.
• The tax due for the second month is not paid by the 25th of the following month.
• The total tax liability for the quarter (net of ITC) reported in Form GSTR-3B is not filed by the due date.

In such cases, interest is calculated separately for each delay: for the first month, the second month, and for the late filing of the quarterly GSTR-3B.

Interest Rate: A rate of 18% is applied to the net tax liability that remains unpaid or is paid after the due date for any month of the quarter. Additionally, a late fee is imposed for delayed filing of returns (GSTR-3B/GSTR-1). This late fee is Rs. 50 per day (reduced to Rs. 20 for nil returns), with a maximum cap of Rs. 5,000. However, no late fee is charged for delays in tax payments during the first two months of the quarter.

Steps to Make Tax Payments Under the QRMP Scheme

Step 1: Access the GST portal and navigate to Dashboard > Payments > Create Challan.

Step 2: Under ‘Reason for Challan’, select ‘Monthly payment for quarterly return’. Choose the financial year, period, and challan type, then click ‘Proceed’.

Step 3:

• To make payments using the 35% challan method, select ‘35% challan’ under challan type.
• To make payments using the self-assessment method, choose ‘Challan on self-assessment basis’.

Step 4:

• If ‘35% challan’ is chosen, click ‘Generate 35% challan’ on the subsequent page. The challan will be automatically generated based on the previous periods’ GSTR-3B data.
• If ‘Challan on self-assessment basis’ is chosen, taxpayers must manually calculate their tax liability and enter the amounts into the appropriate fields. After inputting the values, click ‘Generate challan’.

Note: Taxpayers are not required to make tax payments during the first two months of the quarter if their electronic cash/credit ledger has sufficient balance to cover the tax due, or if there is no tax liability.

Step 5: Complete the payment for the generated challan using your preferred payment method. For more details on GST payment procedures, refer to our article on “Step-by-step process of GST payments”.

To learn more about compliance under the QRMP scheme, consider these articles:

• IFF – All About Invoice Furnishing Facility in GSTR 1
• How to file the IFF on the GST portal?
• How to Change the Profile Under the QRMP Scheme?