Introduction

The Quarterly Return Monthly Payment (QRMP) scheme under GST represents a significant relief for small taxpayers across India. Introduced to ease compliance burdens, this scheme allows eligible businesses to file quarterly GST returns while making monthly tax payments. This comprehensive guide covers everything you need to know about the QRMP scheme, from eligibility criteria to filing procedures and important due dates.

What is the QRMP Scheme Under GST?

The QRMP scheme is a taxpayer-friendly initiative implemented by the GST Council that allows small taxpayers with an annual turnover of up to Rs. 5 crores to file their GST returns on a quarterly basis instead of monthly. This scheme significantly reduces the compliance burden while maintaining the government's revenue flow through monthly payments.

Under this scheme, taxpayers are required to pay their GST liability every month using a simple challan but need to file their GST returns (GSTR-3B) only once a quarter. This system balances the cash flow needs of the government with the compliance ease for small businesses.

Eligibility for the QRMP Scheme

To be eligible for the QRMP scheme, taxpayers must meet the following criteria:

1. Annual turnover not exceeding Rs. 5 crores in the preceding financial year
2. Regular GST registration (composition dealers are not eligible)
3. GSTR-3B and GSTR-1 returns filed for the preceding month/quarter as applicable
4. No significant discrepancies in returns filed

The scheme is available to taxpayers in all states and union territories including Goa, Lakshadweep, Kerala, Tamil Nadu, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Puducherry, Andaman and Nicobar Islands, Telangana, and Andhra Pradesh.

How to Opt for the QRMP Scheme

Taxpayers eligible for the QRMP scheme can opt in through the GST portal. The facility to opt in or opt out is available in the first month of each quarter. Once opted for, the scheme will continue until the taxpayer chooses to opt out or becomes ineligible.

The steps to opt for the QRMP scheme are:

1. Log in to the GST portal
2. Navigate to "Services" > "Returns" > "Opt-in for Quarterly Return"
3. Select the period for which you want to opt in
4. Confirm your selection

It's important to note that the option to join the scheme is available only during specific windows before each quarter begins.

Assessment Method for Monthly Payments

Under the QRMP scheme, taxpayers can choose between two assessment methods for their monthly tax liability:

1. Fixed Sum Method

The fixed sum method allows taxpayers to pay a predetermined amount as their monthly GST liability. This amount is calculated as:

• 35% of the tax paid in cash in the preceding quarter if the return was filed quarterly, or
• 100% of the tax paid in cash in the same month of the preceding year if the return was filed monthly

This method is particularly beneficial for businesses with stable monthly turnovers.

2. Self-Assessment Method

Under the self-assessment method, taxpayers calculate their actual tax liability for the month based on their outward supplies and inward supplies attracting reverse charge. This method offers more accuracy but requires proper bookkeeping.

Taxpayers can switch between these methods each month during a quarter, providing flexibility based on their business needs.

Due Dates for Filing Quarterly GSTR-3B

The due dates for filing quarterly GSTR-3B under the QRMP scheme are:

• 22nd or 24th of the month succeeding the quarter (depending on the state)
• For taxpayers in Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Puducherry, Andaman and Nicobar Islands, or Lakshadweep: 22nd of the month following the quarter
• For taxpayers in other states/UTs: 24th of the month following the quarter

Due Dates for Monthly Payments

Even though returns are filed quarterly, GST payments must be made monthly by the 25th of the following month for the first two months of the quarter. For example:

• For April: Payment due by May 25
• For May: Payment due by June 25

For the third month of the quarter, the tax is paid along with the quarterly return filing.

GSTR-3B Return Filing and Monthly Payment of Taxes

The QRMP scheme streamlines the process of GSTR-3B return filing and monthly payment of taxes. Here's how it works:

1. For the first two months of the quarter, taxpayers make monthly payments using form GST PMT-06
2. For the third month, tax payment is made along with the quarterly GSTR-3B return
3. Input Tax Credit (ITC) can be claimed in the quarterly return for all three months

The quarterly return includes details of:

• Outward supplies
• Input tax credit availed
• Tax paid during all three months of the quarter

Benefits of the QRMP Scheme

The QRMP scheme offers several advantages for small taxpayers:

1. Reduced compliance burden with quarterly instead of monthly return filing
2. Flexibility in payment methods (fixed sum or self-assessment)
3. Lower working capital requirements
4. Simplified tax calculation and payment process
5. Reduced chances of late filing penalties
6. More time to focus on business operations instead of compliance

GSTR-1 Filing Under QRMP Scheme

Small taxpayers who opt for the QRMP scheme must file their GSTR-1 returns on a quarterly basis. The due date for filing quarterly GSTR-1 is the 13th day of the month following the quarter.

Taxpayers have the option to upload invoices through the Invoice Furnishing Facility (IFF) for the first two months of the quarter. This allows recipients to claim input tax credit without waiting for the quarterly GSTR-1 filing.

File Quarterly GST Returns on Quarterly Basis

To file quarterly GST returns under the QRMP scheme:

1. Log in to the GST portal
2. Navigate to "Returns" > "Returns Dashboard"
3. Select the appropriate quarter
4. Generate and file your GSTR-3B

The system will automatically account for the tax payments made during the first two months of the quarter.

Annual Turnover Calculation

For determining eligibility based on annual turnover:

1. The turnover is calculated based on the PAN-level aggregate turnover from the previous financial year
2. Taxpayers with multiple GSTINs must consider their combined turnover across all registrations
3. The turnover is calculated from GSTR-3B returns filed for the previous financial year

Special Considerations for Small Taxpayers

The QRMP scheme is designed with small taxpayers in mind. Businesses with an annual turnover below Rs. 5 crores constitute approximately 94% of all GST-registered entities but contribute only about 5% of the total GST revenue. This scheme helps these businesses manage their compliance requirements more efficiently.

The scheme is particularly beneficial for:

• Small retailers
• Service providers with limited transactions
• Small manufacturers
• Businesses operating in remote areas with connectivity issues

Challenges and Solutions

Despite its benefits, taxpayers may face some challenges while adopting the QRMP scheme:

1. Transitioning from monthly to quarterly filing: Maintain proper documentation to ensure smooth transition
2. Calculating monthly payments: Use the GST portal's calculator to determine the right amount
3. Managing cash flow: Plan finances to ensure availability of funds for monthly payments
4. Keeping track of ITC: Maintain proper records to claim accurate ITC in the quarterly return

Conclusion

The QRMP scheme under GST represents a significant step towards ease of doing business for small taxpayers. By reducing the frequency of return filing while maintaining regular tax payments, the scheme achieves a balance between compliance ease and revenue collection.

Eligible taxpayers across India including states like Bihar, Sikkim, Arunachal Pradesh, Nagaland, and union territories like Puducherry, Andaman and Nicobar Islands, Telangana, and Andhra Pradesh should evaluate this option to simplify their GST compliance.

For more information, taxpayers can visit the official GST portal or consult with a tax professional to understand how the QRMP scheme can benefit their specific business situation.

Remember, while the scheme offers flexibility, timely payment and accurate reporting remain essential to avoid penalties and interest charges under GST regulations.

If you require assistance on GST services, Manthan Experts can be your trusted advisor. Contact them at info@manthanexperts.com. to discuss your specific needs and explore how their expertise can benefit your business.