GST, short for Goods and Services Tax, is a comprehensive indirect tax introduced in India on July 1, 2017. It marked a significant shift in the country's tax landscape by replacing a complex web of existing indirect taxes. GST subsumed several taxes, including central taxes like Central Excise Duty, Service Tax, and Additional Customs Duty, as well as state-level taxes such as Value Added Tax (VAT), Central Sales Tax (CST), and Entry Tax. This tax reform aimed to simplify and streamline the tax structure, promote ease of doing business, reduce tax evasion, and create a unified national market by facilitating the free movement of goods and services across state borders. GST operates on a dual structure with both central and state components, making it a destination-based consumption tax that has since become the cornerstone of India's taxation system.

Who is required registration under GST?

• Any business engaged in the sale of goods with an annual turnover exceeding Rs. 40 lakhs in Normal Category states (Rs. 20 lakhs in Special Category states)*.

• Any business providing services with an annual turnover surpassing Rs. 20 lakhs in Normal Category states (Rs. 10 lakhs in Special Category states).

• All individuals previously registered under different tax laws (e.g., Excise, VAT, Service Tax, etc.) are required to register under GST.

• In cases of business transfer or demerger, the transferee must register, effective from the transfer date.

• Businesses involved in interstate transactions.

• Casual taxable persons (refer to specific criteria).

• Non-Resident taxable persons (refer to specific criteria).

• Agents representing suppliers.

• Those liable to pay taxes under the reverse charge mechanism.

• Entities functioning as Input Service Distributors (refer to specific criteria).

• e-Commerce operators or aggregators**.

• Entities supplying through e-commerce aggregators.

• Individuals offering online information and database access or retrieval (OIDAR) services from a location outside India to a person in India, excluding registered taxable persons.
  
  

*A few states in the Normal Category have decided to maintain the current threshold of Rs. 20 lakhs, whereas certain Special Category states have decided to raise it to Rs. 40 lakhs. 

Special Category States/UT who opted for new limit of Rs.20 lakh 
Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand

Special Category States/UT who opted for new limit of Rs.40 lakh
Jammu and Kashmir, Ladakh and Assam

Normal Category States who choose to keep the old threshold of Rs 20 Lakh
Telangana

** Persons making supply of services through E-commerce sellers/aggregators are exempt from registration if their total sales do not exceed Rs. 20 lakh/Rs. 10 in case of special cateogry states and , as per Notification No. 65/2017 – Central Tax issued on 15th November 2017.

WHAT IS GST?

Late Fees in case of delay in GSTR-1 and GSTR-3B
For nil GSTR-1 and GSTR-3B filing, the maximum late fee is restricted to Rs. 500 per return, with Rs. 250 allocated for both CGST and SGST.

For GSTR-1 and GSTR-3B returns with other than NIL, the late fee varies based on the annual turnover in the previous financial year:

• If the annual turnover is up to Rs. 1.5 Cr., a maximum late fee of Rs. 2,000 per return is applicable, with Rs. 1,000 each for CGST and SGST.

• For turnovers ranging between Rs. 1.5 crore and Rs. 5 Cr., the maximum late fee is capped at Rs. 5,000 per return, with Rs. 2,500 each for CGST and SGST.

• In cases where the turnover exceeds Rs. 5 Cr., a late fee of up to Rs. 10,000 can be charged, with Rs. 5,000 each for CGST and SGST.

Late fees in case of delay in GSTR-9

Turnover upto ₹ 5 Cr               ₹ 50 Per Day

Turnover ₹ 5 Cr to ₹ 20 Cr     ₹ 100 per day
Turnover above ₹ 20 Cr         ₹ 200 per day

Maximum late fees in case of GSTR-9 cannot be more than 0.04% of Turnover in case of turnover upto ₹ 20 Cr or 0.25% of Turnover in case of above ₹ 20 Cr.

Late fees in case of delay in GSTR-4
The late fee is limited to a maximum of Rs. 500 per return for nil filing and Rs. 2,000 for non-nil filing.

Interest on delay in payment of GST
Interest is imposed on delayed payment of GST liability, calculated on the net tax liability after deducting input tax credit claims. This interest obligation applies to any taxpayer who:

• Submits GST payments (CGST, SGST, or IGST) after the due date.

• Claim excessive input tax credit

• Reduces output tax liability.

  If GST is not paid within the due dates of filing return Interest at following rates has to be paid:

  Tax paid after due date*      18% per annum                              
  Excess ITC Claimed or           24% per annum
  reduction in Output Tax                                     

Frequently Asked Questions (FAQs)

1. What is Quarterly Returns with Monthly Payment (QRMP) Scheme?

Quarterly Returns with Monthly Payment (QRMP) Scheme is for eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on quarterly basis, while paying their tax dues on monthly basis through a challan.

2. Who all are eligible for the QRMP scheme?

All taxpayers whose aggregate annual turnover (PAN based) is up to ₹ 5 Crore in the current financial year and the preceding financial year (if applicable) and have already filed their last due Form GSTR-3B return, are eligible for the QRMP scheme.

If your aggregate turnover (PAN based) for FY 2019-20 and current Financial year is up to ₹ 5 Crore and you have filed your FORM GSTR-3B for the month of October 2020 (let’s say at least) by 30th November 2020, you will be assigned to QRMP scheme, by the GST system.

For example: A taxpayer’s whose Annual aggregate turnover (AATO) was less than/ up to ₹ 5 Crore in preceding FY and has filed Form GSTR- 3B for the period June 2021 (let’s say at least) by last day of the first month of the next quarter ie by 31st July, 2021.

3. Is the QRMP scheme available to every taxpayer?

No, the QRMP scheme is not available to every taxpayer.

The QRMP scheme can be availed only by those taxpayers who are liable to file Form GSTR-1 and Form GSTR-3B returns and can be opted by:

• Registered taxpayer (Normal taxpayer, SEZ Developer, SEZ unit)

• Taxpayers who have opted out of composition scheme

• Persons applying for a fresh registration as Normal taxpayer

Note: The scheme is not available for taxpayers whose Annual aggregate turnover (AATO) is more than ₹ 5 Crores.

4. What are the pre-conditions for opting for QRMP scheme for a taxpayer?

Following pre-conditions must be fulfilled by a taxpayer to opt for QRMP scheme:

• Taxpayer must be registered as a regular taxpayer or opted out of composition scheme

• Taxpayer must have a valid User ID and password

• The Annual aggregate turnover (AATO) in current and preceding FY (if applicable) is up to ₹ 5 Cr.

• The Form GSTR-3B return for most recent tax period has been filed.

• There is no data saved on the portal in Form GSTR-1 for the applicable period (i.e. period for which you are opting for QRMP scheme)
  
  

5. What is IFF?

IFF stands for Invoice Furnishing Facility for taxpayers who have opted for QRMP scheme to declare outward supplies to a registered person for first two months of any quarter. It is an optional facility. The facility will be similar to Form GSTR-1. It allows filing for only B2B invoices, credit notes, debit notes etc. Last date of filing IFF for a month is the 13th of the next month. This will allow recipient taxpayers to take credit of these invoices in the same month, if reported in IFF, by the supplier taxpayer under QRMP scheme.

6. Presently, I am filing Form GSTR-1 at quarterly frequency and Form GSTR-3B at monthly frequency, will I be able to opt out of the QRMP scheme?

Please note that from the quarter January – March 2021 onwards, you will be assigned to QRMP scheme by the GST System. You can choose to opt out from the QRMP scheme and if so, you would need to file both Form GSTR-1 and Form GSTR-3B on Monthly frequency.

However, you may continue to remain in the QRMP scheme and file both Form GSTR-1 and Form GSTR-3B at quarterly frequency.

7. From where can I opt in or opt out from the QRMP scheme?

Login to the GST portal using your valid credentials and then navigate to Services > Returns > Opt-in for Quarterly Return option to opt in or opt out of the QRMP scheme.

8. Can I avail the QRMP scheme at any point of time during a financial year?

You can opt in or opt out of the QRMP scheme as per the timelines mentioned in the table below:

9. Can a GST Practitioner opt in/ opt out of the QRMP scheme on behalf of taxpayer?

No, a GST practitioner cannot opt in/ opt out of the QRMP scheme on the behalf of taxpayer. A GST Practitioner can only view details.

10. I have multiple GSTINs on the same PAN in same/different States. Can I opt in for the QRMP scheme for some specific GSTINs only?

Yes, you may opt for the QRMP Scheme for certain GSTINs and remain out of the scheme for remaining GSTINs, registered on a common PAN.

11. Before commencement of QRMP scheme, will the GST system assign the existing taxpayers to this scheme?

Yes, for the Quarter Jan to Mar 2021, all the registered taxpayers whose Annual Aggregate Turnover (AATO) in the FY 2019-20 was up to ₹ 5 Crore and has not exceeded ₹ 5 Crore turnover in current FY i.e. 2020-21 and have furnished there return in Form GSTR-3B for the month of October 2020 by 30th November 2020, will be assigned to QRMP scheme by the GST system.

12. Can I change and save my profile for two consecutive quarters in a year?

No, you cannot take actions for two consecutive quarters simultaneously on the GST Portal. At any given point of time, you can opt in/ opt out for a single quarter only.

Note: The option selected in the current quarter will continue to be the option for the subsequent quarters also.

13. I have saved Form GSTR-1 for this quarter but filing of Form GSTR-3B return is pending. Can I opt for the scheme now?

No, you cannot opt for the QRMP scheme, if you have saved any details in Form GSTR-1 for that particular quarter. You can delete the saved records in Form GSTR-1 and then choose to opt into the scheme.

14. As part of transition to the scheme, my GSTIN was migrated to the QRMP scheme for the Quarter Jan-Mar 2021. Do I need to again opt for the scheme for next quarter(s)?

No, once you have opted for QRMP scheme or have been assigned to QRMP scheme by the GST system, the same will continue for subsequent quarters (unless you want to opt out of the scheme or in case the aggregate turnover for current FY exceeds ₹ 5 Crore during a quarter).

15. I have opted for the QRMP scheme. Will I now be required to file both Form GSTR-1 and Form GSTR-3B on quarterly frequency?

Yes, if you opt for QRMP scheme, both Form GSTR-1 and Form GSTR-3B will be required to be filed at quarterly frequency. However, Payment needs to be made every month, for tax dues on monthly basis through a challan.

16. I am a new registered taxpayer; will I be able to opt for the QRMP scheme?

Yes, new registered taxpayer whose AATO is up to ₹ 5 Crores can opt for the QRMP scheme based on the following conditions: The registration is granted on any date during the first month of a quarter will be able to opt for QRMP scheme from the beginning itself.

For example, a person granted registration upto 31st January, 2021, will be able to opt for QRMP Scheme from the quarter Jan-Mar, 2021 itself by 31st January, 2021.

If, however, the registration is granted on any of the dates during latter 02 months of a quarter, they will be able to opt for QRMP scheme only from next quarter onwards.

For example, a person granted registration on or after 1st February, 2021, will be able to opt for QRMP Scheme only from Quarter Apr-June, 2021 onwards and will have to file Form GSTR-1 and Form GSTR-3B returns monthly, for the months of February and March, 2021.

17. Whether it is required to exercise the option every quarter / year?

No, registered persons are not required to exercise the option every quarter. Where such option has been exercised once, they will continue to furnish the return as per the selected option for future tax periods, unless they revise the said option or their AATO exceeds ₹ 5 Crore.

18. If a tax payer has opted for QRMP scheme and his AATO exceeds ₹ 5 Crores, then will the scheme be valid?

No, in case the AATO of a taxpayer exceeds the limit of ₹ 5 Crores, the tax payer will not be eligible for the QRMP scheme.