The Indian government has introduced the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme to alleviate the burden. The QRMP Scheme allows eligible taxpayers to file their GSTR-3B returns quarterly while making monthly tax payments. In this blog post, we will walk you through the steps to make tax payments under the QRMP Scheme, ensuring a hassle-free experience for small businesses.
The QRMP Scheme is designed for registered taxpayers with an aggregate annual turnover of up to Rs. 5 crore in the preceding financial year. Under this scheme, eligible taxpayers have the option to file their GSTR-3B returns quarterly while making monthly tax payments.
Under the QRMP Scheme, registered persons are required to pay the tax due for each of the first two months of the quarter by the 25th of the following month in that quarter. Let's take an example to illustrate this: if the tax due for the month of February 2021 (Month 2) is Rs. X, it should be deposited by 25th March 2021. This ensures that businesses stay compliant and fulfill their tax obligations on time.
To make tax payments under the QRMP Scheme, taxpayers should use Form GST PMT-06. There are two methods available for tax payment: the fixed sum method and the self-assessment method. Let's explore these methods in detail.
Under the fixed sum method, taxpayers are required to pay an amount equal to 35% of the tax paid in cash as reflected in the pre-filled challan. For instance, if the tax paid for the quarter Jan-Mar'21 was as follows:
The tax to be paid in each month for Apr'21 and May'21 will be calculated as follows:
However, if a taxpayer has been filing monthly returns prior to opting into the QRMP scheme, they have the option to pay an amount equal to the tax paid in the last month of the preceding quarter. For example, if the tax paid for the monthly return period of Mar'21 was:
The tax to be paid in each month for Apr'21 and May'21 will be:
Under the self-assessment method, taxpayers manually calculate their tax liability, taking into consideration the available input tax credit (ITC). The taxpayer refers to Form GSTR-2B to determine the amount of ITC available. After arriving at the tax liability, the taxpayer deposits the calculated amount using Form GST PMT-06.
Due Date for the Third Month and GSTR-3B Filing: The tax payment for the third month of the quarter is due by the 22nd or 24th of the month succeeding the quarter. Importantly, this payment must be made together with the filing of the GSTR-3B return.
Under the QRMP Scheme, interest is applicable in two scenarios:
If the tax payment is not made within the due date specified, interest will be applicable from the due date of furnishing Form GST PMT-06 until the date of making the payment. It's essential to submit the payment on time to avoid incurring interest charges.
If the Form GSTR-3B return is not filed within the due date, interest is applicable as per the provisions of Section 50 of the Central Goods and Services Tax (CGST) Act. The interest is calculated based on the tax liability, net of input tax credits (ITC), reported in the Form GSTR-3B for the relevant quarter.
In addition to interest charges, late filing fees are applicable for delayed submission of returns (GSTR-3B/GSTR-1). A late fee of Rs. 50 per day is charged (Rs. 20 for nil returns), subject to a maximum of Rs. 5,000. It's important to note that no late fee is charged for delays in payment of tax for the first two months of the quarter.
Log in to the GST portal using your credentials.
Navigate to the Dashboard and go to the "Payments" section. Click on "Create challan."
Under "Reason for Challan," choose the "Monthly payment for quarterly return" option.
Select the financial year and period for which you are making the payment.
Choose the type of challan (either the 35% challan method or the self-assessment method).
If you have opted for the 35% challan method, click on "Generate 35% challan." The system will auto-generate the challan based on your previous periods' GSTR-3B.
If you have chosen the self-assessment method, manually compute your tax liability and enter the amount in the relevant cells. Then click on "Generate challan."
If your electronic cash/credit ledger has a sufficient balance or if you have a nil tax liability, you don't need to make any tax payment during the first two months of the quarter.
Once the challan is generated, proceed to make the payment using your preferred mode of payment. Follow the instructions provided on the portal to complete the payment process.
Remember to make the tax payment by the due date, which is the 25th of the next month for the first two months of the quarter. The payment for the third month is due by the 22nd or 24th of the month succeeding the quarter and should be made along with the GSTR-3B filing.
It's important to ensure timely payment to avoid any interest or penalties.
The QRMP Scheme has proven to be a boon for small taxpayers, reducing their compliance burden by allowing them to file GSTR-3B returns quarterly. By following the above steps, taxpayers can easily make their monthly tax payments under the scheme. It is crucial to make payments on time to avoid any interest or penalties. Embrace the QRMP Scheme and streamline your tax payment process for a hassle-free experience as a small business owner.
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