The Indian government introduced the Quarterly Return with Monthly Payment (QRMP) Scheme to facilitate GST compliance among small taxpayers. This scheme aims to alleviate the compliance burden on small taxpayers with an annual turnover of up to Rs. 5 crores.
Under this scheme, taxpayers are obligated to file GSTR-3B, a summary return, on a quarterly basis. However, the tax payment must be made on a monthly basis. Taxpayers can choose to pay the tax liability for the first two months of the quarter by the 24th of the following month or pay the tax for each month by the 22nd of the following month. The third month’s tax liability can be offset against the available input tax credit (ITC).
Taxpayers can voluntarily opt for the QRMP Scheme at the commencement of any quarter of the financial year. Once enrolled, taxpayers are required to continue with the scheme for the entire financial year.
The QRMP Scheme provides numerous advantages to small taxpayers, including reduced monthly and quarterly returns frequency, minimising the compliance burden. Furthermore, it enables taxpayers to manage their cash flow better by requiring them to pay taxes only on a monthly basis. Additionally, taxpayers can avail themselves of the benefit of ITC every month.
The QRMP Scheme is a tax compliance scheme under India’s Goods and Services Tax (GST). It is designed to simplify 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 legally required to file GSTR-1 and GSTR-3B monthly. But now, that requirement has changed to quarterly. For instance, if you are eligible for the QRMP Scheme, then for the quarter that ended in 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.
The facility to avail of the benefits of the QRMP Scheme is available around the year on the common portal. To be eligible for this scheme, you must meet the following criteria:
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.
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 can only opt into the scheme from the quarter Apr-Jun 2023.
If you have availed of 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.
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 24th of the following month. Remember to select “Monthly payment for the quarterly taxpayer” as the reason while creating your challan. You can use either of two methods to make your monthly tax payment, as below:
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.
If your last GSTR-3B were filed monthly, your pre-filled challan would 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).
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 calculate 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.
After availing of 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 the 22nd or 24th of April 2023.
The table below show the due date of filing GSTR-3B for each state or union territory:
|22nd of the month after the end of the quarter||24th of the month after the end of the quarter|
|Chhattisgarh||Jammu and Kashmir|
|Dadra and Nagar Haveli||Punjab|
|Daman and Diu||Chandigarh|
|Andaman and Nicobar Islands||Arunachal Pradesh|
|Telangana and Andhra Pradesh||Nagaland|
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:
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.
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 increase the taxpayer base for the Government.If you are looking 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. Busy has covered everything from creating GST invoices to auto-generating E-Way Bills and E-Invoices.