Quarterly Return Filing & Monthly Payment of Taxes (QRMP) Scheme
To simplify the process of filing returns for small business taxpayers, the QRMP scheme has been launched by the Indian government. This guide will explain what the scheme is, the criteria to avail it, and what you’d have to do once you have been registered under this scheme.
- What is the QRMP scheme?
- Why is the QRMP scheme important?
- Criteria for the QRMP scheme
- How to avail the QRMP scheme
- When to avail the QRMP scheme and submit returns
- Payment of taxes under the QRMP scheme
What is the QRMP scheme?
Brought into effect from 1st January, 2021, the Quarterly Returns Monthly Payment (QRMP) scheme is one that allows registered taxpayers with an aggregate turnover of up to INR 5 crores in the previous financial year to file returns on a quarterly basis and make tax payments on a monthly basis.
Previously, taxpayers were required to file GSTR-1 and GSTR-3B monthly, but with the QRMP scheme, they can file returns once a quarter. For example, in the quarter of April-June, you can file returns once and pay taxes for April by the due date in May. Under this scheme, you need to pay taxes on a monthly basis (i.e., the first two months of a quarter) using the fixed sum method (through a pre-filled challan) or self-assessment method (due tax amount after adjusting ITC). These two methods will be explained in detail further on in this guide.
Once you opt for this scheme, you will continue to be in this scheme unless you cross the turnover threshold or opt out of it.
Why is the QRMP scheme important?
- It is essential that small business taxpayers are aware of this scheme since it would help reduce the number of returns they have to file in a year.
- With this scheme, eligible taxpayers can also make use of the optional Invoice Furnishing Facility (IFF) . IFF allows you to file four GSTR-1 returns in a year, and upload invoices for the first two months of a quarter instead of waiting until the end of the quarter while filing the return. With IFF, your buyers can also claim Input Tax Credit (ITC) faster.
Criteria for the QRMP scheme
Who can avail this scheme?
If you’re not a previously registered taxpayer (normal taxpayer/SEZ developer/SEZ unit), if you have just obtained a new registration, or if you’re opting out of the Composition Scheme , you can still choose the QRMP scheme. However, if you are a GST practitioner, you cannot opt in/out of the QRMP scheme on behalf of a taxpayer.
The choice to avail this scheme is also dependent on the Goods and Services Taxpayer Identification Number (GSTIN). So, if you have one Permanent Account Number (PAN) and several GSTINs, you can avail the QRMP scheme for certain GSTINs, depending on the following criteria.
Criteria
- You can avail this scheme only if you are liable to file Form GSTR-1 and Form GSTR-3B returns.
- You need to have an aggregate turnover of up to INR 5 crores or less in the preceding financial year. If your turnover crosses this threshold amount, you will not be eligible for the scheme from the next quarter.
- You should have filed your last due GSTR-3B return.
- You should not have any data saved in Form GSTR-1 in the portal for the period in which you’re opting for the scheme. Once you have deleted the saved information in Form GSTR-1, you can opt for the scheme.
How to avail the QRMP scheme
You can opt in/out of the QRMP scheme by visiting the GST portal :
- Click Login >> Services >> Returns.
- Then, click the Opt-in for quarterly return option.
If you are a previously registered taxpayer:
If you had an annual turnover of up to INR 5 crores for the financial year 2019-20, and if you have filed the GSTR-3B return for October 2020 by November 30th 2020, you would have automatically been migrated to the QRMP scheme for the quarter of January-March 2021. If you have been migrated, you will be assigned a certain return option for this quarter.
In the current financial year, if you have a turnover of up to INR 1.5 crores and
filed GSTR-1 on a quarterly basis, you will be assigned the GST quarterly return option.
filed GSTR-1 on a monthly basis, you will be assigned the GST monthly return option.
In the preceding financial year, if you had a turnover between INR 1.5 crores-5 crores, you will be assigned the GST quarterly return option.
If you are a registered taxpayer and have not been migrated, you can opt for this scheme once you fulfill the criteria.
If you are a newly registered taxpayer:
You can opt for this scheme if you have been given registration during the first month of a quarter. However, if you have been given registration during the latter two months of a quarter, you can opt for QRMP only from the next quarter. For example, for the quarter of April-June, if you have been registered by April, you can avail the QRMP scheme for that quarter. If you have been registered only in May or June, then you cannot avail QRMP for that quarter, and can only avail it for the next. Till then, you will have to file GSTR-1 and GSTR-3B monthly.
When to avail the QRMP scheme and submit returns
You can opt in/out of the scheme for a certain quarter between the first day of the second month of the preceding quarter and the last day of the first month of the quarter that follows. For example, if you want to opt for this scheme for the quarter of April-June, you should do so between February 1st to April 30th.
You should submit the GSTR-3B return for each quarter by the 22nd or 24th of the following month, as per the state/union territory where your principal place of business is registered. Based on the criteria mentioned previously (that the last GSTR-3B should be filed before opting for QRMP), if you wish to opt for the QRMP scheme for the quarter of April-June, you should have submitted your GSTR-3B return for March by the 22nd or 24th of April. In case you opt out of the scheme, you will have to file GSTR-1 and GSTR-3B on a monthly basis.
Under the QRMP scheme, you can use the Invoice Furnishing Facility (IFF) to upload invoices for the first two months of a quarter. For each month, you can submit details of your outward supplies to a registered person till the 13th of the following month. For the last month, you will have to submit GSTR-1.
Payment of taxes under the QRMP scheme
For the first two months of a quarter, you will have to pay taxes through Form PMT-06 and generate a payment challan. The payment for each month should be made by the 25th of the following month. You can use two modes of payment:
Fixed sum method
If your last GSTR-3B was filed quarterly, you can get a pre-filled challan for an amount equal to 35% of tax amount (paid in cash) in the previous quarter. However, if you are a new taxpayer, have not filed your last GSTR-3B, or opted out of the Composition scheme, you cannot access the 35% challan.
If your last GSTR-3B was filed monthly, you can get a pre-filled challan for an amount equal to the full tax amount (paid in cash) in the last month of the previous quarter.
Self-assessment method
Here, you can submit the actual tax amount due on inward and outward supplies, along with the available ITC.
The tax amount you have submitted for the first two months can be used for adjusting any liability you have in the quarter through form GSTR-3B.
