To simplify the burden of compliance with Goods and Services Tax (GST) for small businesses, the government launched the Quarterly Returns with Monthly Payment (QRMP) scheme. This program concerns taxpayers with a turnover below Rs. 5 crore. It eases the process by permitting them to submit GSTR-3B returns quarterly along with monthly GST payments. Such quarterly returns decrease the number of filings needed throughout the year.
Overview of QRMP Scheme
The Quarterly Return and Monthly Payment (QRMP) scheme is a plan by the Central Board of Indirect Taxes and Customs (CBIC) within the Goods and Services Tax (GST) framework. This intends to ameliorate the process of filing for small taxpayers, allowing them to present quarterly GSTR-3B returns with monthly tax payments. This scheme is aimed at relieving the compliance burden and increasing the productive capacity of cash flow handling for eligible taxpayers. The QRMP scheme has been in action since January 1, 2021.
Earlier, taxpayers needed to submit GSTR-1 and GSTR-3B monthly, but the QRMP scheme enables them to file returns once a quarter. For instance, in the April-June quarter, you can file returns one time and deposit taxes for April by the due date in May. This scheme requires you to pay taxes on a monthly basis (the initial two months of a quarter) utilizing the fixed sum method (via a pre-completed challan) or self-assessment (tax amount due after allowing for ITC).
Eligibility Criteria for QRMP Scheme
The facility to make use of the advantages of the QRMP Scheme is present throughout the year on the common portal. You must fulfil the following criteria to be qualified for this scheme:
- You should be ready to file GSTR-1 and GSTR-3B returns. You must have listed the recent GSTR-1 and GSTR-3B returns that you owed on the date you selected to utilize the QRMP Scheme.
- You must not carry any data saved in your Form GSTR-1 for the quarter in which you have picked to wield the option to use the QRMP Scheme. If any saved data is present, you must delete it prior to enrolling in the scheme.
- Your Aggregate Annual Turnover (AAT) must be at most Rs. 5 Crores during any present or earlier financial year quarter. If your AAT in any quarter during the current financial year goes over that amount, you will not be qualified for the QRMP Scheme and must begin documenting your returns monthly from the next quarter onwards.
- After you are enrolled in the QRMP Scheme, you do not need to exercise this option every quarter. You will continue filing your returns according to your chosen option unless you opt to revise your selection.
According to Section 25 of the CGST Act, many GSTINs subscribed under the same PAN can each pick the QRMP Scheme separately. Thus, a few GSTINs under a PAN may pick the scheme, whereas others may not.
QRMP Scheme Monthly Tax Payments
If you subscribe under the QRMP Scheme, you must pay your outstanding taxes for the initial two months by a deposit of the tax amount in Form GST PMT-06. It would help if you achieved this on or prior to the 24th of the following month. Bear in mind that you should choose “Monthly payment for the quarterly taxpayer” as the cause while generating your challan. You can make the monthly tax payment by using either of two methods:
Fixed Sum Method
The GST Portal offers a feature which allows you to create a pre-filled challan with Form GST PMT-06 for a sum of 35% of the whole tax paid in cash in the preceding quarter. Nonetheless, you can only do this if your earlier GSTR-3B return was filed quarterly.
If your final GSTR-3B were filed monthly, your pre-filled challan would correspond to a sum equal to the tax paid in cash in the last month of the preceding quarter.
To utilize the monthly tax payment option under the Fixed Sum Method, you must have filed your returns for at least one entire tax period (a tax period in which you are enrolled from the first to the final day).
Self-Assessment Method
A person also has the option to pay the outstanding tax amount by estimating the tax debt on their inward and outward supplies and using the Input Tax Credit in Form GST PMT-06. To aid in calculating ITC, you can consult the auto-populated GSTR-2B, which comprises your declaration of Input Tax Credit for the month.
Any tax sum submitted in the initial two months of the quarter is modifiable against the tax liability outstanding at the culmination of the quarter, as displayed in GSTR-3B.
Claims of Input Tax Credit under QRMP
The GST Quarterly Return Monthly Payment (QRMP) scheme permits valid taxpayers to assert Input Tax Credit (ITC) monthly while recording quarterly returns. ITC can be stated on the basis of invoices uploaded by suppliers in their GSTR-1, viewable in the taxpayer’s GSTR-2B report. Under QRMP, taxpayers must submit the Invoice Furnishing Facility (IFF) for the initial two months of every quarter to assert ITC, assuring there is no lag in cash flow. This enables persistent ITC claims even with the filing of quarterly GSTR-1. Precise and prompt filing under IFF is essential to ensure smooth ITC flow without interruptions.
Invoice Furnishing Facility (IFF)
An Invoice Furnishing Facility (IFF) is an alternate facility provided under Rule-59(2) of the CGST Rules, 2017. This facility permits you, as a QRMP taxpayer, to record your outward supplies (sales) made to subscribed purchasers on a monthly basis. This recording can be helpful for your buyers as it permits them to demand input tax credit (ITC) in the very month they get your invoice. Nevertheless, utilizing IFF is entirely optional, and you can elect to report these details solely during your quarterly GSTR-3B filing.
IFF is offered for quarterly taxpayers who desire to transfer input tax credit (ITC) to their recipients (purchasers/customers) in first two months of a quarter.
The taxpayer has to comply with the B2B invoice particulars of sales transactions (inter-state as well as intra-state) together with debit and credit vouchers of the B2B invoices published during the month. You can upload the net worth of invoices limited to Rs.50 lakh every month.
The particulars submitted in IFF will be shown in the recipients’ GSTR-2A, GSTR-2B, GSTR-4A or GSTR-6A. IFF for a month will cease following the due date of 13th of forthcoming month, and cannot be filed subsequent to this date.
Opting for the QRMP Program
Taxpayers can opt for the QRMP program through the GST portal. The option to opt in or out is present from the starting day of the second month of the previous quarter to the end day of the initial month of the quarter for the choice enforced. For example, to opt for QRMP for the July-September quarter, taxpayers must select between May 1st and July 30th.
Timetable for Opting In/Out
The preference made by the taxpayer will be relevant for the whole financial year unless they choose to keep out. If a taxpayer gets disqualified (e.g., if their turnover surpasses Rs. 5 crore in a quarter), they must go back to monthly filing from the forthcoming quarter.
Interest and Late Fees
- Calculation of Interest: Interest is attributable if the tax paid through FSM is lower than the actual liability or if SAM payments are postponed. The rate is 18% per year, assessed from the owed date of payment until the actual payment date.
- Delayed Fee Charges: A late fee of Rs. 5000 is charged for the slow filing of GSTR-3B. No delayed fee is levied for postponement in monthly tax payments under PMT-06.
Payment Mode
The QRMP program permits you to dispense your monthly tax liability by challans in spite of quarterly returns. You have two payment options:
- Online Payment: This is the go to method as it’s easy, safe, and provides instant confirmation. You can utilize various online payment methods, such as debit card, net banking, or credit cards, through the certified bank websites or the GST portal.
- Offline Payment: You can create the challan form electronically and then dispense it offline at earmarked banks that acknowledge GST challan payments. Keep in mind that offline payments may need some days to show in your GST account.
Final Thoughts
The QRMP program delivers the primary benefit of quarterly filing of GST returns, successfully lowering the burden and cost of monthly returns. This feature makes the scheme notably attractive to small businesses since the filing of a monthly return is one that urges taxpayers to calculate and file returns every month, which increases the likelihood of tax assessment and documentation errors. Thus, the QRMP scheme is basically for each accessible business having fewer transactions; it suggests a very direct method of calculating tax liabilities. Besides, this reduced conflicts between an involved supplier and buyer as problems may be treated over a three-month period. The scheme is a precious option for small businesses, simplifying the process of GST compliance and reducing potential disputes and errors.
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