The Quarterly Return Filing and Monthly Payment of Taxes (QRMP Scheme) was introduced by the Central Board of Indirect Taxes and Customs (CBIC) to ease the compliance burden on small and medium-sized businesses. This scheme allows eligible GST taxpayers with an aggregate annual turnover of up to ₹5 crore to file their GST returns quarterly while making monthly tax payments, making it an efficient and simplified option for businesses across various sectors.

What is the QRMP Scheme?

The QRMP Scheme is a compliance relief measure under the GST regime. It enables eligible registered taxpayers with an aggregate annual turnover of up to ₹5 crore to file GSTR-3B returns quarterly instead of monthly. However, the tax payment is still required to be made on a monthly basis.

The primary objective of this scheme is to streamline the GST compliance process for small and medium enterprises. By reducing the frequency of return filing, the scheme not only eases the compliance burden but also enables better management of working capital. This is particularly important for businesses with limited resources, where cash flow management is a critical factor in sustaining operations.

The scheme is implemented through the official GST portal, where eligible taxpayers can opt into the scheme. Eligible taxpayers can exercise the option on the GST portal and continue under the scheme unless they become ineligible or opt out. Once opted in, the taxpayer is required to make tax payments on a monthly basis while filing GSTR-3B quarterly and GSTR-1 either monthly through the Invoice Furnishing Facility (IFF) or quarterly, as applicable.

Eligibility criteria for QRMP Scheme

Eligibility for the QRMP Scheme is straightforward, targeting small and medium-sized businesses. The key eligibility criteria are as follows:

• Turnover limit: The scheme is available to taxpayers with an aggregate turnover of up to ₹5 crore in the preceding financial year. This turnover limit is calculated on a PAN India basis, meaning the combined turnover of all GSTIN numbers under a single PAN should not exceed ₹5 crore.
• Opt-in mechanism: Taxpayers who wish to avail themselves of the QRMP Scheme can exercise the option through the GST portal within the prescribed timelines. Once opted in, taxpayers can continue under the scheme unless they become ineligible or choose to opt out.
• Regular taxpayers: Only regular taxpayers under the GST regime are eligible for the QRMP scheme. This means that taxpayers registered under the Composition Scheme, Input Service Distributors(ISD), non-resident taxpayers, and taxpayers liable to deduct or collect tax at source are not eligible.

Note: Taxpayers whose aggregate turnover exceeds ₹5 crore in any quarter during the financial year will no longer be eligible for the scheme in the subsequent quarter. Additionally, if a taxpayer fails to file their GSTR-3B returns for the preceding tax period, they will be automatically ineligible for the QRMP scheme in the next quarter.

Benefits of the QRMP Scheme

The scheme offers numerous benefits that make it an attractive option for eligible taxpayers. Some of the key benefits include:

• Reduced compliance burden: By allowing quarterly filing of GSTR-3B returns, the scheme significantly reduces the compliance burden on small and medium-sized businesses. This reduction in the frequency of filings allows businesses to focus more on their core operations rather than being bogged down by administrative tasks.
• Improved cash flow management: One of the most significant benefits of the QRMP scheme is the improvement in cash flow management. By making tax payments on a monthly basis while filing returns quarterly, businesses can better manage their working capital. This is especially important for businesses that experience seasonal fluctuations in revenue.
• Interest savings: Under the QRMP Scheme, businesses can avoid interest liability on tax dues by making the required monthly tax payments and filing returns within the prescribed due dates. This helps reduce additional compliance costs associated with delayed payments.
• Flexibility in payment methods: The scheme offers flexibility in tax payment methods, allowing taxpayers to choose between the Self Assessment Method and the Fixed Sum Method. This flexibility ensures that businesses can select the payment method that best suits their financial situation.
• e-Invoicing compliance: For businesses required to comply with e-Invoicing regulations, the QRMP Scheme can be used alongside e-invoicing requirements, enabling taxpayers to manage both compliances through the GST framework.

These benefits make the QRMP Scheme an attractive option for small businesses looking to streamline their GST compliance process.

Who should choose the QRMP Scheme?

The QRMP Scheme is a good option for businesses that want to reduce the burden of GST compliance while continuing to meet their tax obligations. It is particularly suitable for:

• MSMEs with an aggregate annual turnover of up to ₹5 crore.
• Businesses with limited accounting or compliance resources.
• Businesses looking to reduce the frequency of GST return filing.
• Seasonal businesses with fluctuating sales during the year.
• Taxpayers with stable transaction volumes who prefer a simpler compliance process.
• Businesses whose customers do not require immediate monthly Input Tax Credit (ITC) reflection.

The scheme can help save time, reduce administrative effort, and improve cash flow planning by allowing quarterly return filing instead of monthly filing.

However, businesses with a high volume of B2B transactions should assess their requirements carefully before opting for the scheme. Such businesses may need to use the Invoice Furnishing Facility (IFF) regularly to ensure their customers can claim ITC on time. In some cases, monthly GST filing may be a more suitable option.

When should you avoid the QRMP Scheme?

While the QRMP Scheme can simplify GST compliance, it may not be suitable for every business. Businesses with a high volume of B2B transactions or customers who require monthly Input Tax Credit (ITC) reflection may find monthly GST filing more beneficial. Similarly, businesses with dedicated accounting teams and well-established compliance processes may not experience significant advantages from quarterly return filing. Before opting for the QRMP Scheme, taxpayers should assess their transaction volume, customer requirements, and compliance needs to determine whether the scheme is the right fit for their business.

QRMP Scheme vs Monthly GST filing

The QRMP Scheme helps reduce the compliance workload for eligible taxpayers while maintaining regular tax payments. However, businesses with a large volume of B2B transactions or customers who rely on timely Input Tax Credit (ITC) claims may find monthly GST filing more suitable for their operational requirements. 

Exercising the option of QRMP Scheme

If a registered business owner wishes to file their returns through the QRMP scheme, then they have to opt for the quarterly format option by logging into the GST portal. It should be noted that the option should be selected within the time period ranging from the first date of the second month of the previous quarter to the last date of the first month of the quarter in question.

For example, if a taxpayer wants to file quarterly returns for the July–September quarter, the option must be exercised between May 1 and July 31.

Once opted into the QRMP Scheme, the registered taxpayer can continue under the scheme for subsequent tax periods unless they opt out or become ineligible. However, there are a few cases where the taxpayer may become ineligible for quarterly filing:

1. If the taxpayer becomes ineligible for the QRMP Scheme (aggregate annual turnover exceeds ₹5 crore during the current financial year).
2. If the taxpayer has not furnished the relevant returns due on the date of exercising the QRMP option.

How to calculate tax under the QRMP Scheme?

Calculating tax under the QRMP scheme involves a clear and systematic approach. The scheme offers two methods for calculating and paying taxes: the Self-assessment Method and the Fixed Sum Method. Understanding these methods is crucial for ensuring accurate and timely tax payments:

Self-assessment Method:

• Under this method, taxpayers are required to calculate the tax payable for each month based on the actual turnover and input tax credit available for that period.
• The taxpayers must assess their tax liability for the month and make the payment accordingly using Form GST PMT-06. This method is particularly useful for businesses with fluctuating monthly turnovers, as it allows for precise calculation of tax liability based on actual sales.
• The Self Assessment Method provides flexibility and accuracy, ensuring that taxpayers do not overpay or underpay their tax liability.

Fixed Sum Method:

• The Fixed Sum Method allows taxpayers to pay a fixed amount of tax each month based on their previous return. The fixed sum is generally calculated as 35% of the tax paid in cash in the previous quarter if the taxpayer filed quarterly returns, or 100% of the tax paid in cash in the corresponding month of the preceding quarter if the taxpayer filed monthly returns.
• Taxpayers can simply make the payment of the fixed sum each month without the need to calculate the exact tax liability. This method is ideal for businesses with consistent sales throughout the year.
• This method simplifies the payment process and reduces the administrative burden on businesses, making it a popular choice for those with steady revenue streams.

Payment deadlines:

• Taxpayers must ensure that the tax is paid by the 25th of the following month, by using Form GST PMT-06. For instance, the tax liability for January must be paid by 25th February. Late payments may attract interest charges, so timely payment is crucial.
• At the end of the quarter, taxpayers are required to reconcile the monthly tax payments with their quarterly GSTR-3B return. Any discrepancies must be addressed, and additional tax payments (if any) should be made before filing the return.

Note: Businesses opting for the Self Assessment Method must ensure accurate calculations to avoid penalties. Meanwhile, those using the Fixed Sum Method should be aware that any significant changes in sales could affect the accuracy of their tax payments.

Interest under QRMP Scheme

The Quarterly Return Monthly Payment (QRMP) scheme has specific provisions for interest on late payments, and understanding these is crucial for businesses opting into the scheme. The interest payment will be dependent on the method of payment chosen by the taxpayer under the scheme.

Interest payment under Fixed Sum Method (FSM)

Note: Under the Fixed Sum Method, no interest is payable if the taxpayer deposits the prescribed amount in Form GST PMT-06 by the due date, even if the actual tax liability for the quarter is higher. However, interest may apply if the quarterly tax liability remains unpaid after the due date of filing GSTR-3B.

Interest payment under Self Assessment Method (SAM)

Under the Self-Assessment Method in the QRMP Scheme, if the tax payment is delayed or short, interest at 18% per annum is applicable on the outstanding tax amount from the due date of payment until the actual date of payment.

If a taxpayer delays filing the quarterly GSTR-3B return, applicable late fees and interest may be levied in accordance with GST provisions. However, no late fee is prescribed for delays in furnishing Form GST PMT-06, although interest may apply on delayed tax payments.

Late fee under QRMP Scheme

Under the QRMP scheme, late fees apply primarily when taxpayers fail to file their quarterly returns or furnish details of outward supplies within the prescribed deadlines.

The late fee for GSTR-3B is generally ₹50 per day of delay (₹25 each under CGST and SGST), while the late fee for a NIL GSTR-3B return is ₹20 per day of delay (₹10 each under CGST and SGST), subject to the maximum late fee limits prescribed under GST law from time to time.

Due dates for quarterly filing GSTR-3B under QRMP Scheme

The due dates for filing quarterly GSTR-3B returns under the QRMP Scheme are generally the 22nd or 24th of the month following the quarter, depending on the taxpayer’s principal place of business and the state or union territory in which they are registered.

IFF Under QRMP Scheme

The Invoice Furnishing Facility (IFF) is a unique and optional feature provided under the QRMP scheme that allows taxpayers to upload and furnish the details of outward supplies (sales) monthly, even though they are filing their GSTR-1 and GSTR-3B returns quarterly. This facility is particularly beneficial for businesses that want to ensure their buyers can claim Input Tax Credit (ITC) on a timely basis.

Some key features of IFF include:

• Monthly reporting of B2B invoices: Taxpayers who opt for the QRMP scheme can upload their B2B sales invoices for the first two months of the quarter using IFF. This ensures that the details of these invoices are available to the recipients for claiming ITC without waiting for the quarterly GSTR-1 return.
• Invoice limit: Taxpayers can upload invoices with a cumulative value of up to ₹50 lakh per month through IFF.
• No late fees or interest: There are no late fees or interest charges associated with using IFF. Amendments in the GSTR-1 return is not possible after uploading the invoice through IFF. So, accuracy is essential while using this facility. Once invoice details are furnished through IFF, they need not be reported again in the quarterly GSTR-1 return.

By uploading B2B invoices monthly through the IFF, the recipients can see these invoices in their GSTR-2A and GSTR-2B, enabling them to claim ITC on a timely basis. This helps maintain a smooth cash flow and ensures that the buyers are not waiting for the quarterly GSTR-1 filing to claim ITC, thus providing flexibility to them, without increasing the business’ compliance burden.

How to apply for the QRMP Scheme?

Applying for QRMP Scheme is a straightforward process. Here’s a step-by-step guide:

1. Login to the GST portal: Begin by logging into the official GST portal using your credentials.
2. Navigate to the QRMP section: Go to Services > Returns > Opt-in for Quarterly Return.
3. Select the relevant quarter: Choose the quarter for which you want to opt-in. The option is available for each quarter, so ensure you make the selection before the deadline.
4. Confirm and submit: After selecting the quarter, review the details and confirm your choice. Submit the application to complete the process.

Eligible taxpayers can exercise the option within the prescribed timelines on the GST portal. Once opted in, taxpayers continue under the QRMP Scheme for subsequent tax periods unless they opt out or become ineligible.

Note: Eligible taxpayers may be automatically assigned to the QRMP Scheme by the GST system based on their filing status and turnover criteria. However, they can choose to continue under the scheme or opt out through the GST portal, subject to the applicable conditions.

Opt-out process

If a taxpayer wishes to opt out of the QRMP Scheme, they can do so through the GST portal within the prescribed timelines by selecting the monthly return filing option. It is important to note that opting out will require the taxpayer to revert to monthly filing of applicable GST returns, subject to the provisions of the GST law.

Conclusion

The QRMP Scheme is a valuable compliance measure for eligible businesses seeking to reduce their GST compliance burden. By allowing quarterly return filing with monthly tax payments, the scheme offers flexibility and improved cash flow management. This makes it particularly advantageous for Micro, Small, and Medium Enterprises (MSMEs), who often face resource constraints in managing their tax obligations.

Eligible taxpayers with an aggregate annual turnover of up to ₹5 crore may consider opting into the scheme to take advantage of its benefits, ensuring a smoother and more efficient GST compliance experience.

*This article is for information only. For more details please visit msme.gov.in or cbic.gov.in, or consult with a GST practitioner,CA or tax consultant for professional advice.

FAQs