QRMP SCHEME Question No.01

QUESTION

I have opted for QRMP scheme and uploaded IFF (Sales invoices) on portal for the month of Jan-2021 Taxable Value Rs. 1000000/- GST Rs. 18000/- ( CGST 9000 SGST 9000) (b) I am having credit ledger opening balance of Rs.50000 ( CGST 25000+ SGST 25000) as on 1st January-21 (c) Jaunary-2021 month input tax credit as per 2B Rs. 10000 ( CGST 5000 SGST 5000). Whether I am liable to pay any cash challan against January-21 output liabilities? How to discharge January month output tax liability?

ANSWER

Facts of the case: A registered person opted QRMP scheme and uploded IFF ( Sales invoices) on portal for the month of Jan-2021 Taxable Value Rs. 1000000/- GST Rs. 18000/- ( CGST 9000 SGST 9000) and having credit ledger opening balance of Rs.50000 ( CGST 25000+ SGST 25000) as on 1st January-21. Jaunary-2021 month input tax credit as per 2B Rs. 10000 ( CGST 5000 SGST 5000). Whether he is liable to pay any cash challan against January-21 output liabilities?

Law Applicable: RULE 86B. Restrictions on use of amount available in electronic credit ledger

Notwithstanding anything contained in these rules, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of ninety-nine per cent. of such tax liability, in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees:

Provided that the said restriction shall not apply where '

(a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than one lakh rupees as income tax under the Income-tax Act, 1961(43 of 1961) in each of the last two financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or

(b) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of subsection (3) of section 54; or

(c) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of subsection (3) of section 54; or

(d) the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year; or

(e) the registered person is '

(i) Government Department; or
(ii) a Public Sector Undertaking; or
(iii) a local authority; or
(iv) a statutory body:

Circular No. 143/13/2020- GST

A registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of up to 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme.

Portal Related Update 03/02/2021

5. It is noteworthy, that the taxpayers are not required to deposit any amount for the first 02 months of a quarter, if:
a. Balance in Electronic Cash Ledger / Electronic Credit Ledger is sufficient for tax due for the first/ second month of the quarter; or
b. There is NIL tax liability

Interpretation: Tax liability for the month of Jan-2021 is Rs. 18000/- ( CGST 9000 SGST 9000).
Credit ledger opening balance of Rs.50000 ( CGST 25000+ SGST 25000).
Input tax credit for the month of Jan-2021 as per 2B Rs. 10000 ( CGST 5000 SGST 5000).

Total Balance in Credit ledger is Rs Rs.60000 ( CGST 30000+ SGST 30000) as against tax liability of Rs. 18000/- ( CGST 9000 SGST 9000).

Further Restriction on utilization of credit is applicable if value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees. However if your case falls in any of the exceptions given in Rule 86B, then above restriction will not be applicable.

Please check whether your case falls in any of the exceptions given in Rule 86B. If your case falls in any of the exceptions given, then there is no need to pay any cash challan against January-21 output liabilities.

Conclusion: Rule 86B requires mandatory payment of 1% of output liability in cash even if there is sufficient Balance in Electronic Credit Ledger if value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees. However, if your case falls in any of the exceptions given in Rule 86B, then above restriction will not be applicable. (Reply dt. 23/02/2021)