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When it comes to GSTR-1 filing, businesses have to choose between monthly and quarterly returns according to their turnover. In a more relaxed approach, businesses with annual revenue of up to INR 1.5 crore have the option of filing GSTR-1 quarterly, as provided by the government.
However, businesses whose turnover is more than INR 1.5 crore shall file GSTR-1 on a monthly basis.
The choice between monthly GST filing and quarterly GST filing depends not only on turnover but also on operational preferences, cash flow management, and the need for frequent tax updates. Understanding the implications of each option is crucial for business compliance.
The GSTR-1 Form is a return statement filed by regular taxpayers to report all outward supplies (sales) affected during the month or quarter. This return records the sales particulars at both registered (B2B) and unregistered (B2C) entities. GSTR-1 contains detailed information supporting the liabilities declared in GSTR-3B (which are self-assessed monthly).
The filing frequency varies with turnover—monthly GSTR-1 is filed for businesses by the 11th of the following month. At the same time, quarterly filers suppress it by the last date of the month following the quarter. GSTR-1 return consists of 13 tables spread over seven sections, where GSTR-1 details of outward supplies should be furnished in appropriate sections as per the nature of the supply.
This how you can file the GSTR-1:
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Below are the key differences between monthly and quarterly GSTR-1 filings:
Monthly returns have to be filed monthly, while quarterly returns have to be submitted quarterly (this affects compliance and administrative workload). Monthly returns help to claim input tax credits more often, which is good for cash flow. Quarterly returns of credit claims delay claims, leading to cash flow issues for businesses requiring timely credits.
Monthly filings incur higher compliance costs due to more frequent submissions and potential professional fees. Quarterly filings help to limit these costs.
Monthly returns are ideal for larger businesses with higher goals and compliance capabilities. Smaller businesses with fewer transactions should use quarterly returns.
Monthly returns also provide more frequent financial updates to aid with timely planning. Quarterly returns come less frequently and may not be enough for companies that need constant insights.
| Aspect | Quarterly Returns | Monthly Returns |
|---|---|---|
| Frequency | 4 times a year | 12 times a year |
| Forms to be filed> | Sahaj, Sugam, or Normal (Quarterly) | Normal (Monthly) |
| Upload Restrictions | 23rd-25th of the month after the quarter | 18th-20th of the next month |
| Time for Credit Claims | Supplier’s documents accepted till 10th of next month | Accepted till 10th of the following month |
| Editing of Documents | More time to accept/reject, and edit documents | Less time for document editing |
| Credit on Edited Documents | Available in the quarter when edited by supplier | Available in the month when edited by supplier |
| Unavailability of Credit | No credit if the supplier misses a quarter | No credit if the supplier misses two months |
When deciding between monthly and quarterly GSTR-1 filing, businesses must consider various factors that can impact their compliance, cash flow, and administrative workload, such as businesses with turnover up to INR 1.5 crore can go for quarterly returns, while businesses beyond this threshold need to follow up with monthly returns.
With the monthly filing, one can quickly claim the input tax credit, which is a significant benefit in terms of cash flow, especially for businesses with a huge credit requirement.
Larger businesses with higher transaction volumes may benefit from monthly returns to maintain consistent compliance. Smaller businesses might find quarterly filing more manageable.
Monthly filings require more regular administrative effort and resources, while quarterly filings spread out returns and the work associated with them.
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Monthly returns enable more frequent reporting, which may help with timely financial forecasting and decision-making. Quarterly returns are less frequent, which suits businesses that don’t need to be updated frequently.
Ensure the chosen filing frequency aligns with the regulatory requirements based on your business turnover and any specific exemptions that may apply.
High-volume businesses with constant sales and purchases may benefit from monthly returns for better monitoring, while seasonal businesses may prefer quarterly returns for less frequent filing.
Choosing between monthly and quarterly GSTR-1 filing is crucial for business compliance and operational efficiency.
Ultimately, the choice depends on turnover, cash flow needs, business size, and administrative resources. For businesses looking to streamline accounting and filing processes, BUSY Accounting Software offers seamless integration to simplify GST return filing and ensure compliance. Try BUSY today for hassle-free tax management.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.