QRMP Scheme: An Overview of Quarterly Return and Monthly Payment Option under Goods and Service Tax (GST)
The Goods and Services Tax (GWST) Quarterly Return Filing and Monthly Payment of Taxes (QRMP) plan was introduced by the Central Board of Indirect Taxes & Customs (CBIC). Its main aim is to assist small taxpayers with a turnover of less than Rs. 5 crores. Taxpayers can file GSTR-3B quarterly and make monthly tax payments under the QRMP scheme. An integrated solution in Clear GST software makes it simple for you to complete this operation. Businesses and tax experts can quickly upload a CSV file with the list of GSTINs and the chosen filing frequency (monthly or quarterly) in it. In a matter of seconds, the GST portal will be updated with the same. We will cover all you need to know about the QRMP system in this article.
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What is the QRMP Scheme?
The Indian government introduced the Quarterly Returns with Monthly Payments Scheme or QRMP. Its objective is to lessen the cost of compliance for small taxpayers and make it easier for them to remain compliant. Small taxpayers can reduce their compliance needs by filing GSTR-1 and GSTR-3B on a quarterly basis and paying GST on a monthly basis under this plan. The QRMP program offers taxpayers a number of advantages. The following are the major benefits of selecting the QRMP scheme:
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It lessens the taxpayer's responsibilities in relation to filing GST returns. The taxpayers who choose this plan will only need to file four returns instead of twelve GSTR-3B throughout the year.
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This program makes it easy for taxpayers to pay monthly taxes by using the self-assessment technique and pre-filled challan in the first two months of each quarter.
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Taxpayers can choose to participate in the program at any point during the year without facing any limits.
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You can also benefit from a flexible invoicing option. This allows you to submit four GSTR-1s annually. During the first two months of the quarter, you can rapidly claim input tax credits in addition to uploading your invoices.
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It also decreases your expenses for determining your tax liabilities by lowering the frequency of compliance requirements from monthly to quarterly.
Eligibility for QRMP Scheme
The QRMP Scheme is open to registered individuals with an aggregate revenue of up to Rs. 5 crores in the previous fiscal year and who are obliged to file a return in GSTR-3B. Furthermore, starting in the following quarter, the registered person will not be eligible for the plan if their total turnover is above Rs. 5 crores during any quarter of the current fiscal year. It is made clear that the information provided in the taxpayer's returns for the tax periods in the previous fiscal year will be used to compute the total yearly turnover for the previous fiscal year on the common portal. The option to file GSTR-3B quarterly becomes available on January 1, 2021. It is made clear that this program is available based on GSTIN and is voluntary.
How to Opt for the QRMP Scheme?
If an individual has registered and plans to submit their GSTR-3B on a quarterly basis, they must indicate this on the GST site. This can be done between the first day of the second month of the previous quarter and the last day of the first month of the following quarter. For example, if A wanted to file quarterly returns for the April–June 2021 quarter, he should have chosen quarterly filing on the common GST portal between February 1 and April 30, 2021.
After choosing quarterly filing, the registered person must continue to provide his return each quarter for the duration of any subsequent tax period, with the following exceptions:
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The taxpayer will not be allowed to file quarterly returns starting with the following quarter if they are deemed unfit to file (for instance, if their total quarterly turnover exceeds Rs. 5 crore). The taxpayer is required to provide GSTR-3B on a monthly basis in this scenario.
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If the latest return was not given before the date of exercising the choice, the registered person will not be able to choose to furnish quarterly returns.
​For instance, a person is opting for quarterly GSTR-3B filing on 1st December 2020. He will need to furnish his GSTR-3B return for October 2020. This would have been the last return due on the date of exercising the quarterly filing option.
How to Make Monthly Payments under the QRMP Scheme?
Using form PMT-06, the taxpayer must deposit tax by the 25th of the subsequent month for the first and second months of the quarter. The Fixed Sum technique (FSM), commonly known as the 35% Challan technique, or the Assessment Method (SAM) are the two options available to taxpayers for paying their monthly tax obligations.
35% Challan Method or Fixed Sum Method (FSM): The taxpayer is required to pay the amount specified in a pre-filled GST PMT-06 challan for a total equivalent to thirty-five percent of the tax paid in cash.
Example for understanding FSM
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Scenario 1: Assuming quarterly filing of GSTR-3B for the period of January 2021 to March 2021
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Scenario 2: Assuming that monthly GSTR-3 filings were made from January 2021 to March 2021
The Self-Assessment Method, or SAM: Using the current technique, a taxpayer can pay their tax burden by taking into account both their input tax credit and the tax liability on both inward and outgoing supply. The taxpayer must manually calculate their monthly tax liability and pay it using form PMT-06. The taxpayer can utilise form GSTR-2B to find the amount of ITC available for the month.
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There are some situations where a deposit of any amount may not be necessary, like:
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For the first month of the quarter, either the tax due is zero OR the amount in the electronic cash/credit ledger is sufficient to cover the tax liability for that month.
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In case the electronic cash/credit ledger balance for the second month of the quarter is sufficient to cover the total tax liability for both the first and second months of the quarter, OR if there is no tax liability at all.
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Note that a registered person will not be able to use the aforementioned methods unless he has provided the return for the entire tax period that precedes that particular month. A full tax period is one in which the person in question is registered from the first to the last day of the taxation period.
Deemed Monthly and Quarterly Filing of GSTR-3B
The aforementioned process must be followed by the taxpayer if they wish to use the quarterly GSTR-3B form. It will be assumed that individuals who have registered and fall within the categories listed in the table below and have submitted their GSTR-3B return by November 30, 2020, have chosen to file on a monthly or quarterly basis, as explained below.
Due dates for Filing Quarterly GSTR-3B
The following dates are the notification of the quarterly GSTR-3B filing deadlines:
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22nd of the month succeeding such quarter in Chhattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli, Daman and Diu, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh
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24th of the month succeeding such quarter in Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Mizoram, Manipur, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha
Submitting Details of Outward Supplies
Taxpayers who choose to participate in the QRMP program may use the Invoice Furnishing Facility (IFF). It enables quarterly GSTR-1 filers to submit their bills on a monthly basis. Prior to using the IFF, the following considerations should be made:
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The first two months of each quarter are the only times the IFF can be used.
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Only the GSTR-1 return should consist of the invoices for the last month of a quarter.
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If an invoice has already been uploaded to the IFF, it is not necessary to upload it again in GSTR-1.
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The details of B2B invoices for sales transactions (both intra- and interstate) as well as the debit and credit notes from B2B invoices issued throughout the month must be submitted by the taxpayer.
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There is a monthly cap of Rs. 50 lakhs on the total net value of invoices that can be posted.
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The data included in IFF will appear in the recipients' GSTR-2A, GSTR-2B, GSTR-4A, or GSTR-6A, depending on the circumstances.
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The Invoice Furnishing Facility will be operational beginning on January 1, 2021.
Interest under the QRMP Scheme
If the taxpayer chooses one of the following approaches, the interest will be applied as follows:
The 35% Challan Method, sometimes referred to as the Fixed Sum Method (FSM):
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The interest rate will be as follows in the event that the taxpayer chooses the Self Assessment Method (SAM):
The net tax liability that is either unpaid or paid after the deadline for the first two months of the quarter is subject to interest at the rate of 18%. It is significant to remember that if taxes are not paid on time in the third month of a quarter, the taxpayer will be required to pay interest at the rate of 18%. This is true regardless of whether you use the Self Assessment approach (SAM) or the Fixed Sum Method (FSM), also known as the 35% Challan approach.
Input Tax Credit Claim under the QRMP Scheme
A registered person who decides to take part in the QRMP system is not required to follow any different procedures in order to obtain their Input Tax Credit (ITC). ITC available according to GSTR-2B for the month is available to QRMP taxpayers who are utilising the self-assessment technique to calculate their tax payments for the first two months of the quarter. Consequently, they are able to settle their GST bill in full with cash. The quarterly GSTR-1 is filed on the 14th of the month that follows the quarter, at which point the GSTR-2B for that quarter is generated. As a result, in order to make an ITC claim, purchasers who work with suppliers under the QRMP scheme must look for the quarterly GSTR-2B.
Late Fee Under QRMP Scheme
If the quarterly GSTR-3B is not submitted by the deadline, the following late fee must be paid, up to a maximum of Rs 5,000:
Nevertheless, it is made clear that there is no late charge for failing to pay taxes in full during the first two months of the quarter using form PMT-06.
Conclusion
For small firms, it is essential to comprehend the QRMP plan. It lowers the number of filings and also provides operational simplicity and budgetary flexibility. You can consult tax professionals for expert assistance if you are unsure whether to sign up for the QRMP plan.
Frequently asked questions
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What is the QRMP (Quarterly Return and Monthly Payments) Scheme?
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Small taxpayers who meet the program's eligibility requirements can file their GSTR-1 and GSTR-3B on a quarterly basis and make monthly GST payments by challan thanks to the Quarterly Return and Monthly Payments (QRMP) Scheme.
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Who can enroll under the QRMP Scheme?
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The QRMP Scheme is accessible to all taxpayers who have submitted their last due Form GSTR-3B return and whose aggregate yearly turnover (based on PAN) is up to INR 5 Crore for both the current and, if applicable, the previous financial year.
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What are the key features of the QRMP Scheme?
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There is no requirement to deposit any money during the month if there is no tax liability.
Tax deposited within the first two months of the quarter is only usable for adjusting the quarter's liability in Form GSTR-3B. It cannot be utilised for any other reason until the quarter's return is submitted.
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Is there any time limit for QRMP?
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No, QRMP does not have a time limit. The QRMP program is available to you at any time of the year, in any quarter. The beginning day of the second month before the quarter to the last day of the first month of the quarter are the times when individuals registered under GST can choose to use it.
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What are the challenges of the QRMP Scheme?
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It might be laborious and time-consuming to determine for each of a business's GSTINs (PAN) whether to opt for QRMP or to continue with monthly returns. When a taxpayer chooses to participate in the program and uses the Invoice Furnishing Facility (IFF), the documents must be separated between those that are B2B and those that are not. Moving the B2B documents to IFF and the remaining documents straight to the quarterly GSTR-1 return would be beneficial. Furthermore, it becomes increasingly important to reconcile the IFF, sales register, and GSTR-1. Additionally, the taxpayer under the QRMP plan has to select between the Fixed Sum/35% Challan Method and the Self-assessment Method each month for paying taxes.
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What is IFF?
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Under the QRMP Scheme, taxpayers may report out-of-country supplies to a registered person for the first two months of each quarter by using the Invoice Furnishing Facility, or IFF for short. This facility is optional. The 13th of the following month is the deadline for filing an IFF for that month. In the event that the supplier taxpayer reports the credit in IFF under the QRMP Scheme, it will enable the receiver taxpayers to claim credit in the same billing month.
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Where can the taxpayer opt in or opt-out of the QRMP Scheme?
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The taxpayer must navigate to Services > Returns > Opt-in for Quarterly Return after logging into the GST site with legitimate credentials in order to opt in or opt-out of the QRMP Scheme.
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Is it necessary to avail of the QRMP option every quarter?
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No, it is not necessary for the registered individuals to use the QRMP option on a quarterly basis. Unless it is modified or the total yearly turnover surpasses INR 5 Crore, the option will stay active for the upcoming reporting periods after it is exercised.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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