QRMP Scheme Explained: Quarterly GST Filing for Small Taxpayers

The Goods and Services Tax (GST) system in India requires regular return filing, which can be a significant compliance burden, especially for small businesses. To ease this, the government introduced the QRMP (Quarterly Return Monthly Payment) scheme. This scheme allows eligible small taxpayers to file their main GST returns (GSTR-1 and GSTR-3B) on a quarterly basis while continuing to pay their tax dues monthly. This guide explains the QRMP scheme in detail.

What is the QRMP Scheme?

The QRMP scheme is an optional scheme available to registered persons under GST to furnish their GSTR-1 and GSTR-3B on a quarterly basis. However, the payment of tax (if any) needs to be made monthly using Form PMT-06.

Eligibility for the QRMP Scheme

A registered person can opt for the QRMP scheme if their aggregate annual turnover (AATO) in the preceding financial year was up to ₹5 crores. If the AATO exceeds ₹5 crores during a quarter, the taxpayer becomes ineligible for the scheme from the next quarter.

Key eligibility points:

• Must have filed their last due GST return before opting in.
• The option can be availed GSTIN-wise. This means some GSTINs under a PAN can opt for QRMP while others remain monthly filers.

How to Opt-In and Opt-Out of the QRMP Scheme

Taxpayers can opt-in or opt-out of the QRMP scheme on the GST portal. This facility is available throughout the year.

• A taxpayer can opt-in for any quarter from the first day of the second month of the preceding quarter to the last day of the first month of the quarter for which the option is being exercised.
• Once opted in, the scheme remains active unless the taxpayer opts out or becomes ineligible due to turnover exceeding ₹5 crores.
• A taxpayer opting out of QRMP will need to file GSTR-1 and GSTR-3B monthly.

Furnishing of GSTR-1 (Outward Supplies) under QRMP

Taxpayers under the QRMP scheme need to furnish their GSTR-1 on a quarterly basis. However, to ensure that their B2B (Business to Business) customers can claim Input Tax Credit (ITC) on a monthly basis, QRMP taxpayers have the option to use the **Invoice Furnishing Facility (IFF)**.

• Invoice Furnishing Facility (IFF): Using IFF, QRMP taxpayers can declare their B2B outward supplies for the first two months of a quarter. The IFF can be filed up to the 13th of the following month.
• The invoices declared in IFF for the first two months do not need to be re-declared in the quarterly GSTR-1.
• The quarterly GSTR-1 will contain details of all outward supplies made during the quarter, including those not declared in IFF (e.g., B2C supplies, and B2B supplies of the third month).

Payment of Tax under QRMP Scheme (Form PMT-06)

While returns are quarterly, tax payment is still monthly. For the first two months of a quarter, the taxpayer needs to deposit the tax due (if any) using **Form GST PMT-06** by the 25th of the following month.

There are two methods for calculating the monthly tax payment:

1. Fixed Sum Method (35% Challan): The taxpayer can pay 35% of the net cash tax liability paid in the preceding quarter (if returns were filed quarterly) or 100% of the net cash tax liability paid in the last month of the preceding quarter (if returns were filed monthly). An auto-generated challan will be available on the portal.
2. Self-Assessment Method: The taxpayer can pay the actual tax due after considering the outward supplies made, inward supplies eligible for ITC, and any balance in the electronic cash/credit ledger.

For the third month of the quarter, the tax is paid along with the GSTR-3B for that quarter.

Filing of GSTR-3B (Summary Return) under QRMP

Taxpayers under the QRMP scheme need to file their GSTR-3B on a quarterly basis by the 22nd or 24th of the month following the quarter (due dates vary by state/UT).

The GSTR-3B will consolidate the supplies made, ITC claimed, and tax paid (including monthly payments via PMT-06) for the entire quarter.

Benefits of the QRMP Scheme

• Reduced Compliance Burden: Filing main returns quarterly instead of monthly significantly reduces the compliance effort for small businesses.
• Simplified Tax Payment: The fixed sum method for monthly tax payment is straightforward.
• Facilitates ITC for Recipients: The IFF allows B2B recipients to claim ITC monthly, maintaining business continuity.

Conclusion

The QRMP scheme offers a valuable simplification for eligible small taxpayers, helping them manage their GST compliance more efficiently. However, it's crucial to understand the nuances of IFF, monthly tax payments, and quarterly return filing to ensure accuracy and avoid interest or penalties. Businesses should carefully assess if the QRMP scheme is suitable for their operational model and compliance capabilities.

If you need assistance in understanding or opting for the QRMP scheme, or require help with your GST filings, Income Review's GST experts are here to guide you.