Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme under GST

What is QRMP Scheme?

QRMP Scheme by GST System:

Quarterly Return and Monthly Payment of Taxes (QRMP) Scheme allows eligible taxpayers, those with a turnover up to ₹5 crore in the previous year, to file their GST returns (GSTR-1 and GSTR-3B) on a quarterly basis instead of monthly. However, tax payments still need to be made every month through a challan, ensuring a balance between reduced paperwork and timely tax collection.

Benefits of QRMP Scheme for Small Taxpayers

The QRMP scheme in GST offers several benefits for small taxpayers registered under GST:

• Reduced compliance burden: This is the biggest advantage. By filing returns quarterly instead of monthly, small businesses save significant time and resources. They need to dedicate less effort to compiling and submitting data, freeing them to focus on core business activities.
• Simplified record-keeping: With fewer returns to file, the need for meticulous record-keeping becomes less frequent. Small businesses can maintain their records on a quarterly basis, reducing the complexity of managing GST data.
• Lower compliance costs: Since QRMP translates to less time spent on GST returns, it can lead to reduced costs associated with accounting and tax filing software or professional services.
• Improved cash flow: While tax payments remain monthly, the quarterly filing allows small businesses to hold onto their tax liability for a longer period. This can improve their cash flow situation, especially for businesses with seasonal fluctuations in income.

Eligibility for the QRMP Scheme

The QRMP scheme in GST has eligibility criteria based on your business turnover and registration timing. To qualify, your business's total sales across all GST registrations under your PAN must have been up to ₹5 crore in the previous financial year. If your total turnover exceeds the 5 crore threshold, you will no longer be eligible for the QRMP scheme in GST.

There's also a point to consider regarding registration timing. If you're a new business registering for GST:

• Registering in the first month of a quarter allows you to opt-in for QRMP for that same quarter.
• However, registering in the later two months of a quarter means you'll only be eligible for QRMP from the next quarter onwards.

Existing businesses with a qualifying turnover can opt for QRMP anytime. Remember, eligibility is based on your PAN, so the combined turnover of all your GST registrations under that PAN determines your eligibility for the ₹5 crore limit.

Here's an example to illustrate the registration period:

If you register your business on January 15th (first month of Q1 - Jan to Mar), you can opt for QRMP for the entire Q1.

But, if you register on February 20th (second month of Q1), you won't be eligible for QRMP in Q1. However, you can opt for it from the beginning of Q2 (April to June).

Filing and Payment Process under QRMP Scheme

The QRMP scheme simplifies GST compliance for small taxpayers by separating filing and payment processes.

Forms Used:

• GSTR-1 (Sales return): This remains unchanged. You still need to file GSTR-1 for each month, detailing your outward supplies (sales) made to registered buyers.
• GSTR-3B (Summary return): This is where the filing frequency changes. Under QRMP, you only need to file GSTR-3B (summarizing your tax liability) on a quarterly basis. This combines the data from your monthly GSTR-1 filings for that quarter.

Payment Frequency:

While filing GSTR-3B is quarterly, tax payments remain monthly. You'll need to use a challan (Form GST PMT-06) to deposit your calculated tax liability for each month within the specified due date.

Invoice Furnishing Facility (IFF):

The QRMP scheme in GST offers an optional feature called IFF. This allows you, as a QRMP taxpayer, to report your outward supplies (sales) made to registered buyers on a monthly basis. This can be beneficial for your buyers as it allows them to claim input tax credit (ITC) in the same month they receive your invoice. However, using IFF is entirely optional, and you can choose to report these details only during your quarterly GSTR-3B filing.

Payment Mode

The QRMP scheme allows you to pay your monthly tax liability through challans even though returns are filed quarterly. You have two options for payment:

• Online Payment: This is the preferred method as it's convenient, secure, and offers immediate confirmation. You can use different online payment methods like credit card, debit card, or net banking through the GST portal or authorized bank websites.
• Offline Payment: You can generate the challan form electronically and then pay it offline at designated banks that accept GST challan payments. Remember, offline payments may take a few days to reflect in your GST account.

When and how to opt-in QRMP scheme?

The QRMP scheme allows eligible small taxpayers to simplify their GST compliance. Here's how you can opt-in:

• You can opt for QRMP anytime during the year as long as your business meets the eligibility criteria (turnover limit and registration period).
• The process is entirely online and can be done through the GST portal. Here's a simplified breakdown:
  • Login to the GST portal using your valid credentials.
  • Navigate to Services > Returns > Opt-in for Quarterly Return.
  • Select the financial year for which you want to opt for QRMP from the drop-down list.
  • Click Search.
  • The system will display details about your current filing frequency and confirm your eligibility for QRMP.
  • If eligible, you'll have the option to confirm your choice to opt-in.

Deadline for Opting-In:

There's no specific deadline for opting into QRMP within a particular quarter. However, to avail the benefits for a specific quarter, it's best to opt-in before the due date of GSTR-3B for that quarter. This ensures the system reflects your updated filing frequency for that period.

For example, if the due date for GSTR-3B for Q1 (Jan-Mar) is July 20th, it's advisable to opt-in for QRMP before that date to benefit from quarterly filing for Q1.

Challenges under QRMP and How to Manage Them

While QRMP simplifies compliance, there can be a few potential challenges:

• Managing Monthly Payments: While filing happens quarterly, remembering to make monthly tax payments can be easy to forget. Setting reminders or using automated challan generation tools can help ensure timely payments and avoid late fees.
• Accurate Record-Keeping: Though filing is less frequent, maintaining accurate records on a monthly basis is still crucial. Utilize accounting software or well-organized spreadsheets to track your sales, purchases, and tax liabilities.
• IFF Considerations: If you choose to use the optional IFF for reporting outward supplies, ensure you understand the implications for both you and your buyers. Maintaining accurate records and ensuring timely reporting of invoices through IFF is essential.

What are the due dates for filing quarterly GSTR-3B?

The due dates for filing quarterly GSTR-3B under the QRMP scheme depend on the state or union territory where your business is registered: