In general, every business owner in India has to pay certain business taxes that are imposed by the Government. As per the recent transition to the GST tax regime, most businesses are now well aware of different forms of GST payment, payment modes, and processes.
However, not all businesses run at the same scale of operations. Keeping that in mind, the Indian government launched the Quarterly Returns Monthly Payment or QRMP scheme with effect from Jan 1, 2021. This scheme aims to simplify the process of GST return filing for small business owners.
In this guide, we will cover what the QRMP scheme is, eligibility criteria, exercise options, and more that you need to know to get registered under the same.
What is the QRMP scheme?
Under the QRMP scheme, registered taxpayers having an aggregate turnover of up to Rs. 5 crores in the previous fiscal year are allowed to file returns once a quarter while making tax payments every month. The Central Board of Indirect Taxes & Customs (CBIC) introduced this scheme under the GST regime to streamline the tax payments and return filing process for small businesses.
Earlier, taxpayers had to proceed with GSTR-3B and GST1 return filing every month. But with the implementation of this scheme, they can now file returns once every quarter. If you are registered under this scheme, you will continue to follow the return filing and tax payment process as defined under this scheme unless you opt out of it or the business crosses the turnover threshold.
Importance of QRMP scheme for taxpayers
If you are a small business owner who fulfills the aggregate turnover criteria of the QRMP scheme, registering under this scheme will reduce the number of returns you need to file every year.
Besides this, as an eligible taxpayer, you can also benefit from the optional Invoice Furnishing Facility (IFF). This facility allows you to file four GSTR-1 returns every year and upload the invoices for the first two months in a quarter. This way, you need not wait until the end of the quarter to file the return. IFF also allows you to claim Input Tax Credit (ITC) faster.
Eligibility criteria for the QRMP scheme
A registered taxpayer who is required to furnish GSTR-3B and his business generates an aggregate turnover of up to Rs. 5 crores in the last financial year is eligible for the QRMP scheme. In case the aggregate turnover goes beyond the threshold of Rs. 5 crores in any quarter during the current financial year, then he/she will lose eligibility under this scheme from the next quarter.
Furthermore, it has also been clarified that:
- QRMP scheme is optional and can be availed as per GSTIN.
- The quarterly GSTR-3B filing began from Jan 1, 2021, onwards.
- The aggregate turnover for the preceding year will be calculated in the common portal, considering the details furnished in the returns for the tax periods in that year.
- If you have just obtained a new registration, are not a previously registered taxpayer, or are opting out of the Composition Scheme, you can still opt for the QRMP scheme.
- A GST practitioner cannot opt in or out of this scheme on your behalf.
- If you have one PAN but several GSTINs, you can opt for the QRMP scheme for certain GSTINs only.
How to exercise the option for the QRMP scheme?
If you, as a registered person, intend to file GSTR-3B per quarter,
- You need to indicate the same on the GST portal during the period that starts from the 1st of the second month of the preceding quarter and ends on the last day of the first month of the quarter for which you want to exercise the option.
For example: If you wished to file the returns for the first quarter of April to June 2022, you must have opted for quarterly filing between Feb 1, 2022, to Apr 30, 2022, on the common GST portal.
Once you have opted for quarterly filing this way, you will have to continue furnishing the return every quarter for the future tax periods, excluding the following two situations:
- If you become ineligible to furnish the quarterly return as the aggregate turnover crosses Rs. 5 crore mark during a quarter, then you must furnish GSTR-3B every month.
- You will not be eligible to opt for quarterly return furnishing if the last return has not been furnished on the date of exercising this option. That is, if you want to opt for the QRMP scheme for the Apr-Jun quarter, you need to submit GSTR-3B for March by April 22 or 24.
If you choose to opt out of the scheme, then you need to file GSTR-3B and GSTR-1 every month.
More about payment of taxes under the QRMP scheme
Under this scheme, you need to pay taxes through Form PMT-06 and obtain/generate a payment challan. The payment for each of the first two months in a quarter should be made by the 25th of the next month. This can be done in the following two ways:
Fixed sum method
Also known as the 35% challan method, it allows the taxpayer to pay an amount mentioned in the pre-filled challan in Form PMT-06 equal to 35% of the tax paid in cash in the previous quarter. The following table clarifies this tax payment method further:
|S. No.||Type of taxpayer||Amount of tax to be paid|
|1||Those who furnished GSTR-3B for the last quarter||35% of tax paid (cash) in the last quarter|
|2||Those who furnished GSTR-3B per month in the last quarter||100% of tax paid (cash) in the last month of the preceding quarter|
Self Assessment Method (SAM)
This is an existing tax payment method using which you (taxpayer) can pay the tax by considering the tax liability on both outward and inward supplies and the available Input Tax Credit (ITC). You have to calculate the tax liability for a month manually and pay the same amount via Form PMT-06. To ascertain the amount of ITC available for a specific month, you can use Form GSTR-2B.
Other than this, you need not pay any amount as tax in the following situations:
- In the first month of a quarter during which the balance in the electronic cash/credit ledger is enough to cover the tax liability of that month or when you have a nil tax liability
- In the second month of a quarter during which the electronic cash/credit ledger balance is adequate for the cumulative tax liability for both the first and second month of that quarter or when the tax liability is nil
Due dates to file GSTR-3B once in a quarter
The due dates in this regard are based on the registration in specific states and Union Territories, as detailed below:
|S. No.||GST registration in||Due date|
|1||Madhya Pradesh, Chhattisgarh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Karnataka, Maharashtra, Goa, Kerala, Lakshadweep, Tamil Nadu, Puducherry, Telangana, Andhra Pradesh, and Andaman and Nicobar Islands||22nd of the month succeeding a quarter|
|2||Ladakh, Jammu and Kashmir, Himachal Pradesh, Chandigarh, Punjab, Uttarakhand, Delhi, Haryana, Rajasthan, Bihar, Uttar Pradesh, Sikkim, Nagaland, Arunachal Pradesh, Mizoram, Tripura, Manipur, Assam, Meghalaya, West Bengal, Odisha, and Jharkhand||24th of the month succeeding a quarter|
Late fee under the QRMP scheme
If you fail to file the quarterly GSTR-3B within the due date, you are liable to pay a late fee, subject to a maximum penalty of Rs. 5,000, as defined below:
|Act Name||Late fee for one day delay||Late fee for one day delay (for Nil tax liability)|
|CGST Act||Rs. 25||Rs. 10|
|SGST Act||Rs. 25||Rs. 10|
|IGST Act||Rs. 50||Rs. 20|
** No late fee is applicable for delay in payment of tax in the first two months of the quarter in Form PMT-06.
To sum up
The QRMP scheme is highly useful for small business owners having their overall turnover under the threshold limit detailed here. While it aims at simplifying GST return filing for businesses, knowing about the finer details – payment methods, late fee charged, or eligibility, will help you streamline the taxation related to your business.