Important changes related to QRMP Scheme implemented on the GST Portal for the taxpayers

Important changes related to QRMP Scheme implemented on the GST Portal for the taxpayers

The changes announced are really a welcome move as it reduces the burden of QRMP Taxpayers for consolidating the data and the filing the returns.

Few important changes related to QRMP Scheme implemented on the GST Portal for the taxpayers are as given below:

A.Auto population of GSTR-3B liability from IFF and Form GSTR 1 : A taxpayer under QRMP Scheme can declare their liability through optional IFF for Month 1 and Month 2 of a quarter & Form GSTR-1 for Month 3 of that quarter. Declaration of liability in these forms would now be auto-populated in their Form GSTR-3B (Quarterly) for that quarter, based on their filed Form GSTR-1 and IFF. These fields are editable and in case their values are revised upwards or downwards, the edited field(s) would be highlighted in red colour and a warning message will be displayed to the taxpayer. However, the system would not prevent taxpayer from filing of Form GSTR-3B with edited values.

B.Nil filing of Form GSTR-1 (Quarterly) through SMS : Nil filing of Form GSTR-1 (Qtrly) through SMS has been enabled for taxpayers under QRMP Scheme. They can now file it by sending a message in specified format to 14409. The format of the message is < NIL > space < Return Type (R1) > space< GSTIN > space < Return Period (mmyyyy) > .
Example: NIL R1 07XXXXX1234H8Z6 062020 (where return period must be last month of the quarter)

However, NIL filing through SMS can’t be done in following scenarios:
•If IFF for Month 1 or 2 of a quarter is in Submitted stage, but not Filed.
•If invoices are Saved in IFF for Month 1 or 2 of a quarter, which was not submitted or filed by due date.

C.Impact of cancellation of registration on liability to file Form GSTR-1 : In case registration of a taxpayer under QRMP Scheme is cancelled, with effective date of cancellation being any date after 1st day of Month 1 of a quarter, they would be required to file Form GSTR-1 for the complete quarter, as the last applicable return. For example if the taxpayer’s registration is cancelled w.e.f. 1st of April, he/she is not required to file Form GSTR-1 for Apr-June quarter and Form GSTR-1 for Jan-Mar Quarter shall become the last applicable return. However, if the registration is cancelled on a later date during the quarter, the taxpayer would be required to file Form GSTR-1 for Apr-June quarter. In such cases the filing will become open on 1st of month following the month with cancellation date i.e. if cancellation has taken place on 20th May, Form GSTR-1 for Quarter Apr-June can be filed anytime on or after 1st of June.

We would like to advise a word of caution, please cross check the numbers auto populated as it help to identify any issues in auto population.

New Functionalities enabled on GST Portal during the month of April 2021

New Functionalities enabled on GST Portal during the month of April 2021

Change and improvements are the main reasons for success of any reform or product and the same is being adopted by the GSTN. It is goods to note that GSTN is coming up with new features day in day out and enabling the taxpayers to have seamless experience. These new features will definitely improve the user experience as well as improve the efficiency of compliances and minimizing the errors.

Let’s discuss about the new features/functionalities released by GSTN during the month of April 2021

Auto Generation of Form GSTR – 2B for QRMP (Quarterly Returns Monthly Payment) Taxpayers  

For availing input tax credit matching as per Rule 69 of the CGST Rules is to be carried out based on the taxpayers Purchase Register and data auto populated in From GSTR – 2B based on the suppliers filing of Form GSTR – 1 or IFF (Invoice Furnishing Facility). The QRMP Tax payers have also to do matching and for that Form GSTR – 2B is the basis and now the same is made available to the those taxpayers

1. Taxpayers can now view and download their system generated Quarterly Form GSTR-2B, for Jan-March, 2021 quarter, by clicking on Auto-drafted ITC statement for the quarter on 14th April, 2021, by selecting the last month of the quarter (M3).
2. Form GSTR-2B contains details of filed IFFs (for Month M1 & M2) & filed Form GSTR 1 (for Month M3). Form GSTR 2B has two sections of ITC i.e. ITC available and ITC not available (which flows from the supplier’s filed IFF & Form GSTR-1, imports etc.). It also contains tax liability of the taxpayer (which flows from the taxpayers own filed IFF & Form GSTR-1).
3. The default view of Form GSTR-2B is quarterly. However to view Form GSTR-2B of a particular month (M1, M2 or M3), taxpayer has an option to select appropriate month, from the view drop-down to view that month’s data.
4. A hyperlink ‘View advisory’ has also been provided, which on clicking displays the criteria/ cut-off dates considered for generation of quarterly GSTR-2B, as a pop-up, with details of Supplies from/type i.e. Monthly taxpayer, Taxpayer in QRMP Scheme, NRTP, ISD & Import from Overseas/SEZs, and ‘From

• Offline Matching Tool enabled for QRMP Taxpayers

Matching of taxpayers purchase register and data based on the filing of Suppliers Form GSTR – 1 or IFF is an time consuming and complex activity as the taxpayers will many transactions during the return filing period. Automation is the need as it will avoid the user errors and saves time and efforts. Some taxpayers cannot afford investments on technology and for such taxpayers the GSTN has provided an offline utility for matching. With the rollout of QRMP scheme, now the same utility is being made available to the QRMP taxpayers also.

1. The Matching Offline Tool has been updated and now taxpayers under QRMP Scheme will also be able to use it.
2. The system generated Form GSTR-2B JSON file can be used for matching details, as available with them in their purchase register, using the updated Matching Offline Tool.
3. Taxpayers under QRMP Scheme can now navigate to Services > Returns > Returns Dashboard, select the Financial Year and Return Filing Period > SEARCH and click on Download button on Auto – drafted ITC Statement – GSTR -2B tile to download system generated Form GSTR-2B JSON file, for opening and matching it in the matching tool.
4. In the Matching tool dashboard page, an option to select the quarter has been provided and in the purchase register, quarters Apr-Jun, Jul-Sep, Oct Dec and Jan-Mar have been added as the tax periods.

• Auto-population of ITC data in Form GSTR – 3B for QRMP taxpayers

The success of any product or service will depend on the ease of its operations and usage it and providing auto population of data is another key element for return filing.  Reconciliations or error occur when there is data entry. Form GSTR – 3B being a  business critical return, the accuracy in filing of it is the need of the hour and similar to regular taxpayer the Input tax credit data is now being auto populated for QRMP Taxpayers also.

1. Figures of ITC available and ITC to be reversed, will now be auto-populated in Table 4 of Form GSTR-3B of the taxpayers under QRMP scheme, from their system generated quarterly Form GSTR-2B.
2. On the GSTR-3B dashboard page, an additional button ‘System computed GSTR-3B’ has also been provided, by clicking which system computed Form GSTR-3B can be downloaded in PDF format.
3. Taxpayer under QRMP scheme can edit the auto-drafted values as per their records and save the updated details in their Form GSTR-3B. The system will show a warning message to taxpayers in case ITC available is increased by more than 5% or ITC to be reversed is reduced even partially, by them. However, the system will not stop the filing of Form GSTR-3B in these cases.

• Auto-population of Liability data in Form GSTR – 3B for QRMP taxpayers

Similar to input tax credit, the data related to the tax liability to the be discharged by the QRMP taxpayers will be auto populated in Form GSTR – 3B

Liability in Table-3 (except 3.1(d)) of Form GSTR-3B, for the taxpayers under QRMP Scheme, will now be auto-populated on the basis of Filed quarterly Form GSTR-1 (of Month 3) and Filed IFF (of Month 1 & 2). Liability of table 3.1 (d) is auto populated from the filer’s Form GSTR 2B.

Note: Data saved/ submitted in Form GSTR-1 or in IFF, will not be auto-populated as Liability, in Table-3 of Form GSTR 3B

• Generation of From GSTR – 11 based on From GSTR – 1 and GSTR – 5

Entities and organizations which are falling part of the Geneva Convention or as notified by commissioner from time to time have to the take registration under UIN scheme. The main idea of having a different registration number and basis on that they can claim refund on taxes paid by them for their purchases. These organizations are not required to pay taxes as part of the treaty and they are exempted but in GST as exemptions are very limited or restriced they are provided with refund mechanism and for that they have file From GSTR – 11. Now for these taxpayers also based on the suppliers GSTR – 1 or GSTR – 5, the data is auto populated.

UIN holders are required to file details of purchases (inward supplies) in their Form GSTR-11. Now their Form GSTR-11 will be generated on the basis of Form GSTR-1 & Form GSTR-5, filed by their supplier taxpayers. This will facilitate UIN holder’s in filing their refund claim

Check list for filing of Returns by QRMP Taxpayers

In order to address the challenges faced by the small taxpayers who constitute to the majority of the taxpayers, the Government has launched, Quarterly Return Monthly Payment of Taxes Scheme has been launched applicable from 1^st of Jan 2021. As per the 37^th GST Council Minutes there were about 60 Lakhs taxpayers below ₹ 5 crores, which means about half of the taxpayers can take benefit of the scheme.

1. QRMP scheme is applicable to which taxpayers?

It is applicable to all taxpayers whose aggregate turnover is less than ₹ 5 crores.

2. What is the difference in the new quarterly returns scheme compared to the old scheme?

The major difference is the old scheme and new scheme are

1. The taxpayer has to declare monthly B2B supplies details in IFF – Invoice Furnishing Facility
2. The recipient can claim input tax credit during the month of purchases only once IFF is filed and not wait for the Supplier to file his GSTR – 1 on quarterly basis.

3. At what intervals the taxes have to be paid by QRMP taxpayers?

The tax has be paid on monthly basis.

4. On what basis the QRMP tax payer has to pay taxes?

There are two methods for payment of taxes by the QRMP Tax payers

1. 35% of the cash paid in previous quarter to be paid in the first two months of the quarter and what ever is the exact liability has to be paid in the third month.
2. Tax liability for the month can be determined and paid after deducting the input tax credit.

5. How do we make the payment of taxes?

Tax payment will be done through two different documents

1. For the payment of taxes in the first two month using the Form GST PMT-06
2. In the third month also Form PMT-06 will be used but through Table 6 of Form GSTR-3B.

6. How do we report the B2B Tax invoices?

B2B tax invoices for the first two months of the Quarter have to be filed using the Invoice Furnishing Functionality and in the third month have to file using the GSTR – 1.

7. What are the steps to be taken for filing of GSTR – 1 and making payment of taxes under QRMP scheme for the last month of the quarter?

a) Verify the sale reported in IFF for the first two months with the sale day book and if any differences are observed, include them in the third months GSTR – 1

b) Verify the inward supplies for first two months claimed with the purchase register, if any differences are observed include them in the GSTR-3B for the third month

c) If any excess cash is paid in the first two months, the same should be adjusted with the third months liability

d) In case of any missing invoices in the first two months which were not reported or under reported, the same should be reported in GSTR – 1 of the third month and interest should be paid @ 18% from the date of tax invoice to the date of filing payment of tax

e) In case if excess input tax credit has been claimed in the first two months, then the same should be reversed in the third month and interest should be paid @24% of the excess ITC taken from the date of claim to the filing date of GSTR – 3B

f) In case of excess cash is paid and balance is there even after filing of GSTR – 3B for the third month, the excess cash balance can be claimed as refund.

As the QRMP Taxpayers are filing it for the first time, it is advised to take proper care should be taken while filing the quarterly returns and paying taxes. In case of any mistakes observed after filing of the third months return the same can be adjusted in the next quarter but the interest outflow will be more and will impact the bottom line of the taxpayers.