Quarterly Return with Monthly Payment (QRMP) Scheme Under GST

The Quarterly Return with Monthly Payment (QRMP) Scheme was introduced as a trade facilitation measure by the GST Council on 1st January, 2021. It is designed to provide some relief from the burden of GST compliances to small taxpayers. In this article, we will discuss the QRMP Scheme under GST in detail, including eligibility criteria, its advantages, and enrollment procedure.

What is the QRMP Scheme under GST?

The QRMP Scheme is a tax compliance scheme under the Goods and Services Tax (GST) in India. It is designed to simplify the tax compliances for small taxpayers whose annual turnover in the previous financial year was up to ₹5 Crores. Under this scheme, taxpayers can file their GSTR-1 and GSTR-3B Returns each quarter, while paying their due tax each month through a challan.

Before this scheme was introduced, taxpayers were required by law to file GSTR-1 and GSTR-3B every month. But now, that requirement has changed to quarterly. For instance, if you are eligible for the QRMP Scheme, then for the quarter ended December 2022, you may file your returns once at the end of the quarter, but pay your due tax for each month by the due date in the next month. So, for October 2022, you should pay your tax by the due date in November 2022, and so on for the other two months of the quarter.

Under the QRMP Scheme, taxes can be calculated using either the fixed sum method or the self-assessment method. We will discuss each method later in the article.

Eligibility Criteria for QRMP Scheme

The facility to avail the benefits of QRMP Scheme is available round the year on the common portal. To be eligible for this scheme, you must meet the following criteria:

• You should be liable to file GSTR-1 and GSTR-3B returns.

• You must have filed your latest GSTR-1 and GSTR-3B returns that were due on the date you are choosing to avail the QRMP Scheme.

• Your Aggregate Annual Turnover (AAT) must not exceed ₹5 Crores during any quarter in the current or the previous financial year. Once your AAT during any quarter in the current financial year exceeds that amount, you will no longer be eligible for the QRMP Scheme and must start filing your returns on a monthly basis from next quarter onwards.

• You must not have any data saved in your Form GSTR-1 for the quarter in which you have chosen to exercise the option to avail the QRMP Scheme. If there is any saved data, you must delete it before you can enroll in the scheme.

Once you are registered for the QRMP Scheme, you need not exercise the option each quarter. You will continue to file your returns as per your selected option, unless you choose to revise your selection.

As per Section 25 of the CGST Act, multiple GSTINs registered under the same PAN can each opt for the QRMP Scheme individually. In other words, some GSTINs under a PAN may opt for the scheme, while others may not.

When to Avail the QRMP Scheme?

You must indicate your decision to file GSTR-3B quarterly on the GST Portal. You can opt for the QRMP Scheme in any quarter between the first day of the second month of the previous quarter to the last day of the first month of the current quarter, provided you have filed the latest GST Returns that are due on the date you choose to opt in. For example, if you want to opt in for the QRMP Scheme for the quarter Jan-Mar 2023, you should indicate your choice to do so on the GST Portal anytime between 1st November 2022 to 31st January 2023. Starting from 1st February 2023, you will only be able to opt in to the scheme from the quarter Apr-Jun 2023.

If you have availed the QRMP Scheme, you will be able to upload invoices of outward supplies for the first two months of the quarter using the Invoice Furnishing Facility (IFF). This must be done on or before the 13th of the next month. You can also upload invoices on a continuous basis and save the details in your IFF. This facility has been provided so that the recipients of your goods and services (for example, your customers) can see the details of these supplies in their auto-populated GSTR-2A and GSTR-2B returns. This will help your recipients claim their Input Tax Credit within the same month as when the transaction occurred. For the last month of the quarter, the GSTR-1 will have to be filed, since it is required on a quarterly basis. Invoices uploaded using the IFF need not be uploaded again in the GSTR-1 return.

Monthly Tax Payments under QRMP Scheme

If you are registered under the QRMP Scheme, you are required to pay your tax dues for the first two months through a deposit of the tax amount in Form GST PMT-06. You must get this done on or before the 25th of the following month. Remember to select “Monthly payment for quarterly taxpayer” as the reason while creating your challan. You can use either of two methods to make your monthly tax payment, as below:

Fixed Sum Method

The GST Portal has provided a feature which lets you generate a pre-filled challan in Form GST PMT-06 for an amount of 35% of the total tax paid in cash in the previous quarter. However, you can only do this if your previous GSTR-3B return was filed quarterly.

In case your last GSTR-3B was filed monthly, your pre-filled challan will be for an amount equivalent to the tax paid in cash in the final month of the previous quarter.

To avail of the monthly tax payment facility under the Fixed Sum Method, you must have filed your returns for the entire duration of at least one complete tax period (i.e. a tax period in which you are registered from the first to the last day).

Self Assessment Method

An individual also has the option to pay the due tax amount by calculating the tax liability on their inward and outward supplies, and availing the Input Tax Credit in Form GST PMT-06. To help with the calculation of ITC, you can refer to the auto-populated GSTR-2B, which is your statement of Input Tax Credit for the month.

Any tax amount submitted in the first two months of the quarter is adjustable against the tax liability due at the end of the quarter, as reflected in GSTR-3B.

Quarterly Filing of Form GSTR-3B under QRMP Scheme

After availing the QRMP Scheme, you must file your GSTR-3B each quarter, by the 22nd or 24th day of the month following the end of the quarter, depending on the regulations of the state or union territory where you have your primary place of business. For example, you will need to file your GSTR-3B for the quarter of January to March 2023 by 22nd or 24th April 2023.

The two tables below shows the due date of filing GSTR-3B for each state or union territory

Interest Payments under QRMP Scheme

There are different interest calculations for individuals availing QRMP Scheme, depending on the method of tax payment chosen (Fixed Sum or Self-Assessment).

For registered users opting for the fixed sum method:

• If the tax due is paid in the first two months of the quarter (through deposit of the auto-calculated fixed sum amount by the due date), no interest is charged if the entire tax liability is paid off by the due date in Form GSTR-3B.

• If payment is not made by the due date, interest will be payable at the applicable rate until the date when payment is made.

• If Form GSTR-3B is filed after the due date, interest will be payable on the taxable amount after deducting ITC as per Section 50 of the CGST Act.

For registered users opting for the self assessment method, interest will be charged as per Section 50 of the CGST Act on any outstanding tax amount after the due date for the first two months of the quarter. Any interest charged will need to be paid through Form GSTR-3B.

Conclusion

The QRMP Scheme allows small taxpayers to adopt a simpler and more convenient way to meet their tax obligations. This simplified process allows small businesses to be GST Compliant, and helps to increase the taxpayers base for the Government as well.

If you are on the lookout for a solution to help you meet your GST Compliance requirements, you can take a free trial of our GST Accounting Software and see how it eases the burden of tax compliance for your business. From creating GST invoices to auto-generating E-Way Bills and E-Invoices, Busy has you covered.