RBI removes Cooling Period for Bank Branch Audit for CAs

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The RBI notified Rotation Policy instead of Cooling Period for Bank Branch Audit for CAs.

The Reserve Bank of India (RBI) notified the change in norms on eligibility, empanelment, the appointment of Statutory Branch Auditors in Public Sector Banks from years 2020-21 onwards.


The RBI notified Rotation Policy instead of Cooling Period for Bank Branch Audit for CAs. In other words, the concept of compulsory rest for two years for audit firms located in the specified centres, after completion of four years of continuous branch audit, followed till Financial Year 2019-20 has been done away with.

Instead, the branch auditors across all the centres of the country, on completion of four years of continuous branch audit, will be subjected to the policy of rotation i.e. they may be considered for appointment as SBAs of any other PSB.

However, the audit firms will not be eligible to be re-appointed as SBAs, in the same bank where they completed their audit assignment prior to rest/rotation, at least for one cycle of four years.

The RBI further notified the change on norms for selection of branches of Public Sector Banks (PSBs) for Statutory Audit.

Firstly, statutory branch audit of PSBs should be carried out so as to cover 90% of all funded and 90% of all non-funded credit exposures of a bank.

The selection of branches for statutory audit shall include a representative cross section of rural/semi-urban/urban and metropolitan branches, predominantly including branches which are not subjected to concurrent audit.

CPUs/LPUs/and other centralised hubs, by whatever nomenclature called, would be included for branch audit every year.

The selection of branches shall be finalised by each PSB with the consent of their Statutory Central Auditor/s. Secondly, in respect of those branches, which are subject to concurrent audit by chartered accountants and not selected for branch audit, LFARs and other certifications done by concurrent auditors will be submitted to the Managing Director & CEO of the bank.

The banks in turn will consolidate/compile all such LFARs and other certifications submitted by the Concurrent Auditors and submit to Statutory Central Auditor/s as an internal document of the bank.

The RBI notified the change in the procedure for appointment of Statutory Branch Auditors.

Firstly, the list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.

Secondly, the list will be subjected to scrutiny by RBI for identifying the continuing and rested firms and excluding audit firms who have been denied audit.

Thirdly, RBI will, thereafter, forward the final list of all eligible auditors/audit firms to PSBs for selection of the required number of branch auditors/audit firms.

Banks will be required to clearly advise the selected audit firms that each audit firm can take up audit assignments (branch audit) in one PSB only. The audit firm should give its consent in writing for consideration of appointment in the bank concerned for the particular year and the subsequent continuing years.

Fourthly, the consent given by an audit firm is irrevocable and no request from audit firms for changing the bank, after giving its consent will be entertained.

Fifthly, after the selection of branch auditors, PSBs will be required to recommend the names of both continuing and selected branch auditors to RBI for seeking its prior approval before their actual appointment, as per statutory requirement.

The RBI while elaboration on the change in general guidelines applicable to appointment of Statutory Branch Auditors stated that SBAs will have a maximum tenure of four years in a particular bank.

The appointment of SBAs will be made on an annual basis, subject to their fulfilling the eligibility norms prescribed by RBI from time to time, and also subject to their suitability.

“While allotting branches, banks are required to select auditors/audit firms which are in close proximity to their offices/branches. Banks are also required to have a suitable mix of various categories of auditors / audit firms while selecting the branch auditors keeping in view the size of the branches to be audited.

Banks are advised to allot branches, to the extent possible, to the audit firms taking into consideration their category and audit experience in such a way that specialised and larger branches are audited by bigger/experienced audit firms,” the RBI said.

The audit firms retiring as Statutory Central Auditors from a PSB shall not be eligible to be appointed as SBAs of the same PSB during the prescribed cooling period for SCAs from that particular PSB.

The RBI notified change in the eligibility norms for the empanelment of audit firms to be appointed as Statutory Branch Auditors in PSBs.

Read the original RBI Notification: Norms on eligibility, empanelment and appointment of Statutory Branch Auditors in Public Sector Banks from the year 2020-21 and onwards

International Taxation: Decoding DTAA & Foreign Tax Credit

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The Double Tax Avoidance Agreement (DTAA) is essentially a bilateral agreement entered into between two countries. The basic objective is to promote and foster economic trade and investment between two Countries by avoiding double taxation.
  1. WHAT IS DOUBLE TAXATION OF INCOME?

When the same income is taxed more than once,  due to levying of tax by two or more jurisdictions, on the same income asset or financial transaction, this results in double taxation. This may happen, when an assessee – an Individual or a company,  is taxed more than once for the same income in India, either on the basis of place of residence or on the basis of source of accrual, which leads to double taxation.

Countries have started entering into Double Taxation Avoidance Agreements (DTAA) with other countries to resolve double taxation issue so as to ease out the tax burden of their taxpayers. This relief for taxes paid in foreign country is given to taxpayer while taxing the same income in India, which is termed as Foreign Tax Credit (FTC).

B. HOW DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) WORKS?

In any country, the tax is levied based on 1) Source Rule and 2) the Residence Rule.

The source rule holds that income is to be taxed in the country in which it originates irrespective of whether the income accrues to a resident or a non-resident whereas the residence rule stipulates that the power to tax should rest with the country in which the taxpayer resides.

If both rules apply simultaneously to a business entity and it were to suffer tax at both ends, the cost of operating on an international business would become prohibitive and would deter the process of globalization. It is from this point of view that Double Taxation Avoidance Agreements (DTAA) have become significant.

Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

Impact of Double Taxation Avoidance Agreement:

1. WHERE DTAA EXISTS (SECTION 90):

There are two methods of granting relief under Double Taxation Avoidance Agreement.

Exemption method – A particular income is taxed in one of the both countries and exempted in the other

Example- For the Income from Dividend, Interest, royalty and fees for technical services Source Rule is applicable in treaty with Greece, Libyan and United Arab Republic. So for citizen of these 3 countries if the dividend, interest, royalty or fees for technical services is arising in India, then it will be solely taxable in India only and for a resident if such income is arising in any of these 3 countries then the income will solely be taxed in these 3 countries and it will not at all be taxable in India.

Tax Credit method- The income is taxed in both the countries as per the treaty and the country of residence will allow the tax credit / reduction for the tax charged in the country of Origin.

Example- Mr. A (an Indian resident) has received salary from a US company for job in US. Since Mr. A is a resident so his global Income will be taxable in India. In this case, source country is US (since the service has been rendered in US) and resident country is India. So at the time of computation of tax liability of Mr. A, the tax paid in US will be allowed as set off against his total tax liability but limited to the tax payable on such foreign income at Indian tax rates.

Therefore DTAA determines which method to be used first and, if the income is taxable only in one country then exemption method shall be used, but if the same is taxable in both countries then tax credit method comes into play.

In case where Bilateral agreement has been entered under section 90 of the Income Tax Act, 1961 with a foreign country then the assessee has an option either to be taxed as per the Double Taxation Avoidance Agreement (hereinafter referred as “DTAA”) or as per the normal provisions of Income Tax Act 1961, whichever is more beneficial to assessee.

Example- As per DTAA between India and Germany, tax on Interest is specified @ 10% whereas under Income Tax Act 1961, it depends on slab rates for individuals & HUF and flat rates (generally 30%) for other kind of assessees (like firm, company etc). Hence, one can follow DTAA and pay tax @ 10% only.

2. WHERE DTAA DOES NOT EXIST (SECTION 91):

i. If any person who is resident in India in any previous year, in respect of income which arose outside India (and which is not deemed to accrue or arise in India), and paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, then he shall be entitled to the deduction from the tax payable in India,

ii. Deduction shall be lower of:

  • Tax calculated on such double taxed income at the Indian rates.
  • Tax calculated on such double taxed income at the rate of tax of the said country

Example :Suppose Indian Sportsman, resident of India who earns foreign income in form of match fees being professional and dividend income as his other foreign income from the below mentioned countries, then in such case following provisions and method shall govern his taxability:

Therefore, both Tax Credit method u/s 90 and Section 91 deals with Foreign Tax Credit, but still having DTAA is beneficial because assessee is taxed at rate beneficial to him, which is not so in case of NO DTAA.

C. HOW CREDIT OF FOREIGN TAX IS AVAILED IN INDIA?

Rule 128 governs the credit of taxes paid on income earned in foreign country. An assessee shall be eligible to claim credit of foreign tax paid if he complies with provisions stated under Rule 128 of the Income Tax Rules which are discussed as follows:

1. Analysis of Rule 128 introduced under Indian Income Tax Rules

Applicability of the rules

The rules came into force with effect from 1.4.2017 applicable only for resident assessee for the amount of foreign taxes paid by him in a foreign country. The credit is available only if income corresponding to the taxes is offered for tax or assessed to tax in India during the year in which the credit is claimed.

In the cases where the income for which the foreign taxes paid or deducted is offered to taxes for more than one year, the credit will be given across the years in the same proportion to which the income is offered to tax in India during the year in which credit is claimed.

2. Foreign Tax Credit Defined under sub-rule 2:

i. FTC in case of DTAA countries: Taxes that are covered under the said agreement.

ii. FTC in case of other countries (No DTAA): Tax payable under the law in force in that country in the nature of income-tax referred in Section 91.

The LOWER OF tax payable under the act on such income or the foreign tax paid is eligible as FTC. However, while considering the foreign tax paid, it cannot exceed the amount arrived as per DTAA with that country.

3. Utilization of Foreign Tax Credit:

FTC is eligible for adjustment against the tax, surcharge and cess payable under the IT Act. FTC cannot be adjusted against interest, fee or penalty payable under the IT Act. FTC is not available in case foreign tax or part thereof is disputed by the assessee in any manner.

4. Exception & Conditions relating to Foreign Tax Credits:

Credit is allowed in the year in which the income is offered/assessed in India upon the assessee within six months from the end of the month in which dispute is finally settled and assessee furnishes:

  • Evidence of settlement of dispute
  • Evidence that the liability for payment of such foreign tax has been discharged and
  • Undertaking that no refund in respect of such amount is directly or indirectly been claimed. Further, credit for each source of income shall be calculated separately for a specific country and then aggregated. The rate of exchange to be taken for this purpose is TT buying rate on the last day of the month immediately preceding month in which the tax is paid or deducted.

5. Documents required under Foreign Tax Credit:

  1. Furnish FORM 67 duly verified and certified by a Chartered Accountant on or before furnishing return of income u/s 139(1)
  2. Furnishing following certificates or statement specifying:
    • Nature of income and,
    • Amount of Tax paid of which statement given by:
      • Tax authority of that country, or
      • Person responsible for deduction of such tax, or
      • Signed by the assessee:

In this case, it should be accompanied with – an acknowledgment of online payment or receipt or bank counterfoil for proof of payment of tax, if tax is paid by the assessee

  • In case of tax deduction, proof of such Tax deducted at source

D. JUDICIAL PRECEDENTS UNDER FOREIGN TAX CREDIT

1. WIPRO LIMITED F TS – 565 – HC – 2015 (KAR)

The judgment of WIPRO provides that merely because the taxpayer’s income is exempt from tax due to a limited tax holiday provided under the ITA, does not mean that foreign tax credit can be simply denied.

2. TATA SONS [2011] 43 SOT 27 (MUM AT)

Though DTAA with USA provides credit only the tax paid with the Federal Government, credit was extended to the Taxes paid to State taxes as well. It has considered the relief u/s 91 which was beneficial to the assessee than that of the DTAA.

3. VIJAY ELECTRICALS [2015] 54 COM 19 (HYD AT)

Tax credit is available even if the same is not deposited with the overseas Government in the year in which the income is taxable.

6 Crucial changes in GST Rules applicable from January 1st, 2021

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The year 2021 has come up with the various changes in Goods and Service Tax (GST) Rules which will have a direct impact on the business registered under the GST regime and the businessmen who are planning to get themselves registered under GST.
 
Firstly, the CBIC has revised the extent of provisional Input Tax Credit (ITC) claims from 10% to 5%, with effect from 1 January 2021.
 

Firstly, the CBIC has revised the extent of provisional Input Tax Credit (ITC) claims from 10% to 5%, with effect from 1 January 2021. As per the sub-rule (4) inserted in rule 36 of the Central Goods and Service Tax Rules, 2017, a taxpayer filing GSTR-3B can claim ITC only to the extent of 5% of the eligible credit available in GSTR-2A. The amount of eligible credit is arrived upon those invoices or debit notes, the details of which have been uploaded by the suppliers in the GSTR-2A only. The new percentage applies from 1 January 2021 onwards. The ITC claim was earlier restricted to 10% between 1 January 2020 and 31 December 2020 whereas it was 20% for the period from 9 October 2019 till 31 December 2019.

Secondly, the CBIC has amended the Rule 21, which is in respect of the suspension or cancellation of GST Registration. The amendment inserted the additional situation wherein the registration of a person can be suspended if he avails input tax credit in violation of the provisions of section 16 of the Act or the rules; or furnishes the details of outward supplies in FORM GSTR-1 for one or more tax periods which is in excess of the outward supplies declared by him in GSTR 3B for the said tax periods, or violates the provision of rule 86B.

Thirdly, the Board inserted Rule 86B wherein all the registered persons have to pay 1% cash liability so as to curb tax evasion by way of fake invoicing. The Rule 86B is applicable to only those registered persons whose value of taxable supply, other than exempt supply and export, in a month exceeds Rs 50 lakh that means those whose annual turnover is more than 6 crore.

For example, if a dealer has made a sale of Rs 1 crore of the goods whose tax rate is 12% and if he is discharging his tax liability more than 99% though ITC, then he has to pay only Rs.12,000 under this rule. On the other hand, a composition dealer would have paid Rs.1 lakh in cash with this volume of sale.

Fourthly, the CBIC has amended Rule 8 and 9 which pertained to New GST Registration, which provides for the biometric verification i.e. Aadhaar authentication and taking photographs or taking biometric information, photograph and verification of such other KYC documents for the applications for new registration.

However, in the case of those opting not to use Aadhaar, GST registration would be given only after physical verification of the business premise, which could take upto 21 days and in case a notice is issued, even more time.

Fifthly, the Board has amended Rule 59, not to permit the taxpayer to file GSTR 1 if the taxpayers have not furnished the return in FORM GSTR-3B for the preceding two months (for a taxpayer filing monthly returns); he has not furnished the return in FORM GSTR-3B for preceding tax period (for a taxpayer filing quarterly returns) and he is required to discharge the tax liability of at least 1% by cash (see the discussion on Rule 86B) and he has not furnished the return in FORM GSTR-3B for preceding tax period instead of two months.

Sixthly, the CBIC has amended Rule 138(10) which related to E-way Bill wherein the available travel time has been enhanced to 200 Kms. For example, goods dispatched to the destination located at a distance of 550 kms have taken place on February 1, 2021. As per the existing rule, the validity of the E-way bill generated would have expired on February 7, 2021, i.e. one day for 100km starting from the midnight of the generation of the E-way bill. However, as per the amendment, the e-way bill will expire on February 4, 2021, and hence the goods must reach the destination within the time frame.

Due date for filing income tax returns further extended

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The reduced TDS and TCS rate will be for specific payments such as payment for a contract, professional fees, interest, rent etc.
Income tax return filing due date: ITR FOR COMPANIES:- Deadline for filing income tax return for 2019-20 by companies extended by 15 days to Feb 15, 2021and for individuals by 10 days to Jan 10, 2021

In a major development, Income Tax department has extended the deadline for ITR filings. The deadline for filing income tax return for 2019-20 by companies extended by 15 days to Feb 15, 2021. Further, the deadline for filing income tax returns by individuals extended by 10 days to January 10, 2021. Also, the last date to declare under Vivad se Vishwas Scheme extended to 31st January 2021, it was expiring on December 31st.

Deadline for filing income tax return for 2019-20 by companies extended by 15 days to Feb 15, 2021 & deadline for filing income tax returns by individuals extended by 10 days to Jan 10, 2021

Taking to Twitter, Income Tax Department said, “In view of the continued challenges faced by taxpayers in meeting statutory compliances due to outbreak of COVID-19, the Govt further extends the dates for various compliances. Press release on extension of time limits issued today:”

Earlier, direct tax professionals had sought extension for tax audit report, income tax returns for audit cases and time limit for AGMs in the wake of the ongoing pandemic scenario. The Direct Taxes Professionals Association (DTPA) had urged Finance Minister Nirmala Sitharaman for extension of date of furnishing of tax audit report under section 44AB to February 28 and the due date of filing of income tax returns of assessment year 2020-21 in audit cases to March, 31, 2021.

Meanwhile, the IT department on Wednesday said more than 4.54 crore tax returns for 2019-20 fiscal have been filed till December 29. In the comparable period last year, 4.77 crore income tax returns were filed. At the close of deadline for filing ITRs without payment of late fees for fiscal 2018-19 (assessment year (AY) 2019-20), over 5.65 crore returns were filed by taxpayers.

In a tweet on Wednesday, the Income Tax department nudged taxpayers to file their ITRs by the due date. “More than 4.54 crore Income Tax Returns for AY 2020-21 have already been filed till 29th of December, 2020,” the I-T department said.

The data released by the tax department showed that over 2.52 crore ITR-1 have been filed till December 29, 2020, lower than the 2.77 crore filed till August 29, 2019.

Over 1 crore ITR-4 have been filed till December 29 as compared to 99.50 lakh filed till August 29, 2019. An analysis of the data showed that individuals filing tax return for fiscal 2019-20 have slowed so far in the current year, while filings by businesses and trusts have increased.

Returns in ITR-1 Sahaj can be filed by an ordinarily resident individual whose total income does not exceed Rs 50 lakh, while form ITR-4 Sugam is meant for resident individuals, Hindu Undivided Families (HUFs) and firms (other than LLP) having a total income of up to Rs 50 lakh and having presumptive income from business and profession.

Over 33.93 lakh ITR-2 (filed by people having income from residential property) were filed till December 29.

During last year, the due date for filing ITR by individuals who do not need to get their accounts audited was August 31. However, the date has been extended till December 31 this year on account of the COVID-19 pandemic.

ITR-5 (filed by LLP and Association of Persons) filings till December 29, 2020 jumped to 7.09 lakh from 4.14 lakh filed till August 29, 2019. ITR-6 (filed by businesses) filings skyrocketed to over 3.46 lakh till December 29, 2020 as compared to 21,962 filed till August 29, 2019.

ITR-7 (filed by persons having income derived from property held under trust) filings also jumped to over 1.04 lakh till December 29, 2020 as compared to 41,963 till August 29 last year.

Earlier, for the FY 2019-20, the government had also extended the date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) to 31st July, 2020. Now the investment/ payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20. In the income tax forms, Schedule DI enables taxpayers to claim exemptions on investments they made during the extended period, until June 30, 2020.

Under normal circumstances, the last date to take income tax benefits is till March 31 of the financial year. The government had also extended the last date for the issuance of Form 16 by employers to their employees. In fact, the extension has been given for all TDS ( tax deducted at source) certificates, including Form 16. The CBDT has already notified the Income Tax Return Forms for the assessment year (AY) 2020-21 and are available for e-Filing by downloading either excel or Java utility.

Source: Press Release from Ministry of Finance

Govt. cancels GST Registration of 163k Business entities for Non-Filing of Tax Returns

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GST Council, has recommended to reduce / waive the interest/ late fee for delayed filing of GSTR 3B by small taxpayers (having turnover upto Rs. 5 crores) for the tax period from July 2017 to July 2020
To handle the menace of fake firms and circular trading entities, GST officials have cancelled 1,63,042 registrations in the month of October and November this year due to non-filing of GSTR-3B returns for more than six months
The Government has canceled the Goods and Service Tax (GST) registration of 163,000 business entities who have not filed monthly tax returns (GSTR-3B) for the last six months or more.
 

Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.

“All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were cancelled as per standard operating procedure,” one of the officials said.

The Tax officers have been directed to follow up personally with these defaulting taxpayers so that their GSTR-3B returns due for the month are filed by November 30.

The push for better compliance comes on the heels of the tax department’s nationwide drive against fake invoice scams. It is suspected that fraudsters often register firms under GST but remain mostly dormant on compliance while using the status to claim invalid input tax credit (ITC).

As per the sources, in the Ahmedabad zone 11,048 GST registrations have been cancelled. In the Chennai zone, 19,586 suo motu cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.

The officials said that the tax authority is also scanning newly registered entities that have not provided correct details at the time of registration.

Out of 720 deemed registrations granted between August 21 and November 16 this year, where Aadhaar authentication was not done, 55 deemed registrations have been identified for the discrepancy and the process of cancellation was initiated in these cases.

Govt cancels GST registration of 163k business entities over non-filing of tax returns

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The government has cancelled Goods and Services Tax (GST) registration of over 163,000 business entities due to non-filing of tax returns for more than six months to curb the menace of fly-by-night operators who create bogus firms and fraudulently avail input tax credit (ITC) worth thousands of crores.

The Government has canceled the Goods and Service Tax (GST) registration of 163,000 business entities who have not filed monthly tax returns (GSTR-3B) for the last six months or more.

Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.

 “All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were cancelled as per standard operating procedure,” one of the officials said.

The Tax officers have been directed to follow up personally with these defaulting taxpayers so that their GSTR-3B returns due for the month are filed by November 30.

The push for better compliance comes on the heels of the tax department’s nationwide drive against fake invoice scams.

It is suspected that fraudsters often register firms under GST but remain mostly dormant on compliance while using the status to claim invalid input tax credit (ITC). As per the sources, in the Ahmedabad zone 11,048 GST registrations have been cancelled.

In the Chennai zone, 19,586 suo motu cancellations have been done so far in respect of GST taxpayers who have failed to file returns for more than six months.

The officials said that the tax authority is also scanning newly registered entities that have not provided correct details at the time of registration.

Out of 720 deemed registrations granted between August 21 and November 16 this year, where Aadhaar authentication was not done, 55 deemed registrations have been identified for the discrepancy and the process of cancellation was initiated in these cases.

Furthermore, the department would persuade 25,000 taxpayers, who have not filed returns for October that was due by November 24, to comply with tax return deadlines.

QRMP scheme launched for GST payers with turnover up to Rs 5 crore

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Taxpayers can make GST payments through challan every month either by self-assessment of monthly liability or 35 per cent of net cash liability of previous filed GSTR-3B of the quarter. Quarterly GSTR-1 and GSTR-3B can also be filed through an SMS.

The government has launched the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme in a bid to ease the return filing experience of the Goods and Services Tax (GST) taxpayers. The scheme will come into effect from January 1, 2021, it will impact 9.4 million taxpayers, who constitute 92% of the total tax base of GST and have an annual aggregate turnover (AATO) of up to Rs 5 crore.

With the introduction of the QRMP scheme, sources say, small taxpayers would need to file only eight returns – four each GSTR-3B and GSTR-1 – instead of the existing requirement of 16 returns in a financial year, of which 12 are GSTR-3B. The new scheme would also significantly reduce taxpayers’ professional expenses on return filing as they would have to file just half the number of returns as against the current requirement of 16. Also, the QRMP scheme would be available on the common GST portal with the facility to opt-in and opt-out, and opt-in again, as per a taxpayer’s wishes.

The scheme would bring in the concept of providing input tax credit (ITC) only on the reported invoices, thus putting a curb on the menace of fake invoice frauds. Additionally, the QRMP scheme is also likely to have the optional feature of Invoice Filing Facility (IFF) to mitigate the business-related hardships of the small and medium taxpayers. Under the IFF, taxpayers who opt to file their returns quarterly would be able to upload and file such invoices even in the first and second month of the quarter for which there is a demand from the recipients.

The taxpayers won’t need to upload and file all the invoices of the month. Only those invoices, which are required to be filed in IFF as per the recipients’ demands, are to be uploaded. The remaining invoices of the first and second months can be uploaded in the quarterly GSTR-1 return.

The QRMP scheme is based on the existing return system with suitable modifications in a bid to give much-needed flexibility to the small and medium enterprises with regards to GST compliance. It was approved in principle by the GST Council in its 42nd meeting on October 5, 2020.