S No. | Class of Registered Persons | Deemed Option |
1 | Registered individuals with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 quarterly in the current financial year | Quarterly GSTR-3B |
2 | Registered persons with an aggregate turnover of up to Rs.1.5 crore, who have furnished Form GSTR-1 monthly in the current financial year | Monthly GSTR-3B |
3 | Registered persons having an aggregate turnover exceeding Rs.1.5 crore and up to Rs.5 crore in the preceding financial year | Quarterly GSTR-3B |
The taxpayer has to deposit tax using form PMT-06 by the 25th of the following month, for the first and second months of the quarter. The taxpayers can pay their monthly tax liability either in the Fixed Sum Method (FSM), also popular as 35% challan method, or use the Assessment Method (SAM).
Fixed Sum Method (FSM) or 35% challan method:
S No | Type of Taxpayer | Tax to be paid |
1 | Who furnished GSTR-3B quarterly for the last quarter | 35% of tax paid in cash in the preceding quarter |
2 | Who furnished GSTR-3B monthly during the last quarter | 100% of tax paid in cash in the last month of the immediately preceding quarter |
Example for understanding FSM:
Scenario 1: If GSTR-3B for January 2021 to March 2021 was filed on a quarterly basis
Tax paid in cash during Jan’21 – Mar’21 quarter | Tax required to be paid in each of Apr’21 and May’21 | |||
---|---|---|---|---|
CGST | 10,000 | CGST | 3,500 | |
SGST | 10,000 | SGST | 3,500 | |
IGST | 20,000 | IGST | 7,000 | |
Cess | 3,000 | Cess | 1,050 |
Scenario 2: If GSTR-3 was filed on a monthly basis during the quarter of January 2021 to March 2021
Tax paid in cash during Mar’21 | Tax required to be paid in each of Apr’21 and May’21 | |||
---|---|---|---|---|
CGST | 3,000 | CGST | 3,000 | |
SGST | 3,000 | SGST | 3,000 | |
IGST | 5,000 | IGST | 5,000 | |
Cess | 1,000 | Cess | 1,000 |
This is the existing method where a taxpayer can pay the tax liability by considering the tax liability on inward and outward supplies and the input tax credit available. The taxpayer has to manually arrive at the tax liability for the month and has to pay the same in form PMT-06. For ascertaining the amount of ITC available for the month the taxpayer can use form GSTR-2B.
There are certain instances where no amount may be required to be deposited, such as–
There is no procedural difference in the way Input Tax Credit (ITC) is claimed by a registered person opting into the QRMP scheme. The QRMP taxpayers who are using the self-assessment method of calculating the tax payments for the first two months of the quarter can consider the ITC available as per their GSTR-2B for the month. Accordingly, they can pay the balance as cash towards the GST liability.
However, the GSTR-2B for the quarter gets generated on 14th of the month following the quarter upon the filing of quarterly GSTR-1. Hence, the buyers who deal with the vendors under the QRMP scheme will need to refer to quarterly GSTR-2B for ITC claims.
The interest will be applicable as follows if the taxpayer opts for one of the following methods:
Fixed Sum Method (FSM) or popularly known as the 35% challan method:
S No | Scenario | Interest to be paid |
1 | Tax liability mentioned in pre-filled form GST PMT-06 is paid by 25th of the following month | Nil |
2 | Tax liability mentioned in pre-filled form GST PMT-06 is not paid by 25th of the following month | 18% of the tax liability(from 26th of the following month till the date of payment) |
3 | The final tax liability for the first two months is less than or equal to the amount paid through pre-filled form GST PMT-06 | Nil |
4 | The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has been paid within quarterly GSTR-3B due date | Nil |
5 | The final tax liability for the first two months is higher than the tax amount paid through pre-filled form GST PMT-06, and such excess liability has not been paid within quarterly GSTR-3B due date | 18% of the tax liability(from GSTR-3B due date* till the date of payment) |
*22nd or 24th of the month succeeding such quarters based on the state of the taxpayer.
The interest will be applicable as follows if the taxpayer opts for Self Assessment Method (SAM):
The taxpayer has to pay interest at 18% on the net tax liability which remains unpaid or paid beyond the due date for the first two months of the quarter.
It is important to note that the taxpayer has to pay interest at18% if there is any late payment of tax in the third month of a quarter. This is applicable irrespective of the Fixed Sum Method (FSM), popular as the 35% challan method, or Self Assessment Method (SAM).
The late fee should be paid as follows if the quarterly GSTR-3B is not filed within due date, subject to a maximum late fee of Rs 5,000:
Name of the Act | Late fee for everyday of delay | Late fee for everyday of delay(in case of ‘Nil’tax liability) |
CGST Act | Rs.25 | Rs.10 |
SGST Act | Rs.25 | Rs.10 |
IGST Act | Rs.50 | Rs.20 |
Whether to opt into QRMP or to continue with monthly returns must be decided for each of the GSTINs of a business (PAN), which can be tedious and time-consuming. The segregation of the documents as B2B and non-B2B must also be done where the taxpayer opting into the scheme uses the Invoice Furnishing Facility (IFF).
It would help in moving the B2B documents to IFF and the rest directly to the quarterly GSTR-1 return. Moreover, the reconciliation between IFF, sales register and GSTR-1 becomes more essential. Further, the taxpayer under the QRMP scheme must choose between two methods for tax payment every month, i.e. Fixed Sum/35% challan Method and Self-assessment Method.
All the above challenges listed down can be addressed using a single solution – TAXAJ. The following features will help any business as well as tax professional to comply with the rules listed down for the QRMP scheme.