Recent changes in GST Returns and Payments

In line with its objective of and furthering ‘ease of doing business’ the Govt. has introduced a new scheme known as ‘Quarterly Return and monthly payment’(“QRMP”) for the small taxpayers whose aggregate turnover does not exceed Rs. 5.00 cr. The details of the scheme are given below-

Applicability -The scheme applies to those taxpayers whose aggregate turnover does not exceed Rs. 5.00 cr. in the previous financial year. This scheme is optional for these taxpayers which means such taxpayers can opt to file the returns monthly. The option can be exercised from any quarter from the first day of the second month of the preceding quarter to the last day of the first month of the quarter. For example – If a taxpayer wants to opt for October to December quarter then he can exercise this option from 1st August (1st day of the second month of last quarter) to 31st October ( last day of the first month of the current quarter). Also one does not need to exercise the option every quarter but once the option is exercised it will continue until the taxpayer opts out of this scheme. This scheme is effective from 1st January 2021.

Transitioning to the new scheme- This is important to understand. Some taxpayers are already filing GST returns quarterly. So the procedure to switch over to the new scheme has been given in the CBIC circular No. 143/13/2020- GST dated 10.11.2020.

1. The taxpayers whose aggregate turnover is less than Rs. 1.5 cr. In the previous financial year who have been filing GSTR1 on a quarterly basis shall be automatically converted to the new scheme by the GSTN portal to the quarterly filing.
2. The taxpayers whose aggregate turnover is less than Rs. 1.5 cr. In the previous financial year who have been filing GSTR1 on monthly basis shall be automatically converted to the new scheme by the GSTN portal to the monthly filing. The assumption here is that where a taxpayer has been filing the GSTR1 on monthly basis then he will continue as a monthly filer unless he decides to opt for a quarterly scheme
3. The taxpayers having aggregate turnover more than 1.5 crore rupees and up to 5 crore rupees in the preceding financial shall be automatically converted to the new scheme by the GSTN portal to the quarterly filing.

If the above taxpayers want to do monthly filing then they should opt-out of the scheme from 5th of December, 2020 to 31st of January, 2021. Remember the new scheme is effective from January 2021. If a taxpayer subsequently or in the future wants to opt-out of the Scheme for a quarter he can do so from the first day of the second month of the preceding quarter to the last day of the first month of the quarter.

Also, in case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter. For example, if a taxpayer is a quarterly filer from 1st January 2020 and later his aggregate turnover in November 2021 exceeds Rs. 5cr. Then he will not be eligible for quarterly filing from next quarter i.e. Jan to Mar 2022.

Further, the new scheme can be opted GSTN wise. Let’s say if a company having registration in 4 states then he may opt for monthly filing for 2 states and quarterly filing for 2 states.

Invoice Furnishing Facility (“IFF” statement)-

Taxpayers opting to file returns on a quarterly basis will have the option to furnish the details of outward invoices for the 1st and second month of the quarter. This IFF statement for the month can be filed by the 13th of the following month. However, the total value of the invoices to be included in the IFF statement shall not exceed Rs.50 lakhs for each month. The rest of the invoices can be considered in quarterly GSTR1 and also note that the invoices already declared in the IFF statement are not be included in quarterly GSTR1. This IFF utility will be available under Returns Dashboard on the portal. This is to facilitate the availing of ITC by the concerned recipients.

Monthly Payment GST-

Those taxpayers who have opted for the QRMP scheme will be required to make the payment of tax every month. The mechanism for a monthly payment of tax is that for the first 2 months of the quarter they will pay 35% of the GST liability paid in cash in the previous quarter in Form PMT-06 if the taxpayer was filing the returns quarterly in the previous quarter. But if the taxpayer was filing the returns monthly in the previous quarter then the tax to be paid monthly for the first 2 months of the quarter will be the tax paid in cash in the last quarter. This can be explained with the following example-

** This payment has to be made in cash and ITC cannot be utilized for this payment for the first 2 months.

Another Option for Payment of Tax monthly under “QRMP” scheme-

The said persons, in any case, can pay the tax due on a self-assessment basis by considering the tax liability on inward and outward supplies and the input tax credit available, in FORM GST PMT-06. In order to facilitate ascertainment of the ITC available for the month, an auto-drafted input tax credit statement has been made available in FORM GSTR2B, for every month.

Under this option tax payment for the first 2 months of the quarter can be made in cash or by utilizing ITC in Credit Ledger.

The requirements for filing and payment of tax, interest, and late fee are summarised in the table below-

Disclaimer: The views expressed in this article are strictly personal.

The author is a member of The Institute of Chartered Accountants of India.