Monthly vs Quarterly GSTR-1 Filing: Which Is Better for Your Business?

What Is Monthly GSTR-1 Filing?

Monthly GSTR-1 filing means reporting outward supplies every month instead of once a quarter. It is the regular filing pattern for taxpayers who are not using QRMP or are not eligible for it.

The practical benefit is control. Sales data is checked in smaller monthly batches, so errors, missing invoices, and credit/debit note issues are easier to catch before they pile up at quarter-end.

Who Can Choose Quarterly GSTR-1 Filing?

Quarterly filing is available under the QRMP scheme. QRMP means Quarterly Return Monthly Payment . Under this scheme, eligible taxpayers file GSTR-1 and GSTR-3B quarterly but pay tax monthly through a challan. 

QRMP Eligibility Checklist

Note: The ₹5 crore turnover limit is PAN-based, not GSTIN-wise. If the same PAN has GST registrations in more than one State, the turnover across those registrations determines eligibility. Different GSTINs under the same PAN may choose different filing frequencies. One GSTIN may remain monthly while another may use QRMP, if eligible.

What Is IFF?

IFF means Invoice Furnishing Facility. It is an optional facility for taxpayers under QRMP. IFF allows quarterly filers to upload selected outward supply details for the first two months of a quarter, rather than reporting all outward supply details only at quarter-end.

In QRMP, the first two months of the quarter are commonly referred to as M1 and M2. IFF covers B2B invoices, registered credit/debit notes, amended B2B invoices, and amended registered credit/debit notes.

What Can Be Uploaded Through IFF?

IFF can be used to upload B2B invoices, credit notes , debit notes , and amendments related to registered buyers. It is not used for B2C supplies. B2C sales are reported later in the quarterly GSTR-1.

IFF Limit and Due Date

Under Rule 59 of the CGST Rules, quarterly return filers can furnish outward supply details to registered persons for the first and second months of a quarter through IFF, up to a cumulative value of ₹50 lakh in each month. The facility is available from the 1st day of the next month until the 13th day of that month. 

Why IFF Matters for Buyers

Invoices saved, submitted, or filed in the IFF flow to the recipient’s GSTR-2A. Filed invoices reflect in the recipient’s GSTR-2B.

This matters because many B2B buyers check GSTR-2B before claiming ITC. If your invoice does not appear on time, the buyer may follow up with you, delay payment, or ask for correction.

When IFF Helps (Example)

Suppose a small distributor files quarterly under QRMP. In April, the distributor makes:

• ₹38 lakh B2B sales to registered dealers
• ₹12 lakh B2C sales to retail customers

The distributor can upload the B2B invoice details for ₹ 38 lakh through IFF by 13 May, subject to the ₹50 lakh limit. This helps registered dealers see the invoices in their GST records earlier. The ₹12 lakh B2C sales should not go into IFF. They are reported in the quarterly GSTR-1 for April to June. This keeps quarterly filing lighter while still giving key B2B buyers earlier invoice visibility.

How the Monthly Tax Payment Works Under QRMP

Quarterly filing does not mean tax is paid only once a quarter. For the first two months of the quarter, tax is paid through Form GST PMT-06 . For the first two months, payment can be made through either the Fixed Sum Method or the Self-Assessment Method. The due date for the challan is the 25th of the next month.

Fixed Sum Method

Under the Fixed Sum Method, a pre-filled challan is generated in Form GST PMT-06. If you filed monthly returns in the previous quarter, the challan is based on the cash tax paid in the last month of that quarter. If you filed quarterly returns, it is calculated as 35% of the cash tax paid in the previous quarter.

This method is easier because the amount is auto-generated by the portal. It usually works better for businesses with steady monthly sales and predictable tax liability.

Self-Assessment Method

Under the Self-Assessment Method, the taxpayer calculates the actual monthly liability after considering outward supplies, inward supplies, and available ITC as per law. This works better for businesses where sales change sharply from month to month.

Worked Example

A business paid ₹2,00,000 in cash tax for the January to March quarter. It continues under QRMP for April to June. Under the Fixed Sum Method:

If the actual tax for the quarter is higher, the business pays the balance while filing the quarterly GSTR-3B. If the amount already paid is higher, the excess remains in the electronic cash ledger.

GSTR-3B Due Dates Under Monthly and Quarterly Filing

GSTR-3B due dates differ depending on whether the taxpayer files monthly or under QRMP. This matters because QRMP taxpayers may still have monthly payment dates even though their GSTR-3B return is filed quarterly.

QRMP taxpayers should track these dates separately because IFF, PMT-06, GSTR-1, and GSTR-3B do not follow the same deadline. Due dates may also be extended through government notification.

How to Opt In or Opt Out of QRMP

You can opt in or opt out of QRMP on the GST Portal through:

Services > Returns > Opt-in for Quarterly Return

The GST Portal gives the following quarterly selection windows.

Once you choose QRMP, the option remains in effect for future periods unless you change it or become ineligible. If AATO exceeds ₹5 crore, QRMP will no longer be valid.

GSTR-1A: Current-Period Correction Facility

GSTR-1A is useful if you file GSTR-1 and then notice a mistake before filing GSTR-3B for the same tax period.

GSTR-1A is an optional current-period correction facility. It can be used after filing GSTR-1 or after the GSTR-1 due date, whichever is later, and before filing GSTR-3B for the same tax period. Changes made in GSTR-1A auto-populate into GSTR-3B .

This helps reduce one common compliance problem: waiting until the next return period to fix current-period errors. However, GSTR-1A should not be treated as a reason to file carelessly. Buyers may still face ITC timing issues if corrections are made late.

Interest and Late Fees

Interest on Late Tax Payment

Section 50 of the CGST Act deals with interest on delayed payment of tax . It provides for interest at a rate not exceeding 18% as notified by the government.

Rule 88B explains how interest is calculated in specified delayed-return cases. It says interest is calculated on the portion of tax paid by debiting the electronic cash ledger, for the period of delay, where the supplies are declared in the return for that period, and the return is filed late, subject to the stated exceptions. In simple words, late tax payment can raise interest costs even if the return is filed later.

Late Fee for Delayed GSTR-3B

Section 47 of the CGST Act provides for a late fee when certain returns or outward supply details are not filed by the due date. For GSTR-3B, late-fee caps were rationalized through Notification No. 19/2021-Central Tax, dated 01.06.2021. The CGST-side cap is:

Interest, if any, is separate and applies to the delayed tax payment.

Late Fee on IFF

There is no late fee for IFF because IFF is optional and not allowed after the due date. But missing IFF can delay buyer ITC visibility.

Which Filing Option Should You Choose?

The right choice depends on how often your buyers need ITC visibility , how many invoices you issue, and how much GST work your team can manage each month.

Where Accounting Software Helps

Accounting software cannot choose monthly or quarterly filing for you, but it can make either option easier to manage. It helps keep B2B invoices, IFF entries, PMT-06 payments, due dates, and return data in one place. This makes missing invoices or duplicate entries easier to catch before filing.

This is especially useful under QRMP because the work does not stop for the first two months of the quarter. Even if returns are filed quarterly, IFF and tax-payment tracking still require monthly attention.

Conclusion

Monthly GSTR-1 filing gives better monthly visibility and stronger invoice discipline. Quarterly GSTR-1 filing under QRMP reduces return filing work, but it does not remove monthly tax-payment and IFF tracking.

For most small businesses, the decision comes down to buyer expectations. If buyers need regular ITC visibility, monthly filing is safer. If invoice volume is low and buyer pressure is limited, QRMP can reduce compliance work without creating major issues.