Understanding the QRMP Scheme under GST in India

The Goods and Services Tax (GST) regime in India has seen continuous efforts to simplify tax compliance for businesses of all sizes. One of the key initiatives introduced to benefit small and medium enterprises (SMEs) is the Quarterly Return Monthly Payment (QRMP) scheme. This scheme was introduced to make GST compliance easier for businesses with a turnover of up to Rs. 5 crore.

In this blog post, we will dive deep into the QRMP scheme under GST—its features, benefits, and how it works for small businesses in India.

What is the QRMP Scheme?

The Quarterly Return Monthly Payment (QRMP) scheme is a facility under GST that allows small taxpayers to file their GST returns on a quarterly basis while making monthly tax payments. This scheme was introduced in the GST Annual Return (GSTR-9) form to ease the compliance burden on businesses with an aggregate turnover of up to Rs. 5 crore.

Through this scheme, businesses can file their GSTR-1 (Sales Return) and GSTR-3B (Summary Return) on a quarterly basis instead of monthly. However, they will still need to make monthly payments for their tax liabilities.

Eligibility Criteria for QRMP Scheme

The QRMP scheme is available for businesses that meet the following criteria:

  • Turnover Limit: Businesses with an annual aggregate turnover of up to Rs. 5 crore in the preceding financial year can opt for the QRMP scheme. This turnover limit applies to both goods and service providers.

  • Registered Taxpayers: The scheme is applicable only to GST-registered taxpayers who are filing returns on a regular basis.

How Does the QRMP Scheme Work?

The QRMP scheme involves the following key components:

  1. Quarterly Filing of GSTR-1: Under the QRMP scheme, businesses will file GSTR-1 (Sales Return) on a quarterly basis. This means that businesses only need to report their outward supplies for the quarter, unlike the regular system where GSTR-1 is filed monthly.

  2. Monthly Payment of GST: Despite filing returns quarterly, taxpayers under the QRMP scheme must make monthly tax payments through GST PMT-06. The tax is paid based on the estimated liability.

  3. GSTR-3B Filing**: Taxpayers will need to file GSTR-3B, which is the summary return for tax paid, on a quarterly basis. The payment of tax will be made on a monthly basis by selecting GST PMT-06.

  4. Use of the IFF (Invoice Furnishing Facility): To ensure that input tax credit (ITC) is passed on to the buyer in a timely manner, businesses can use the Invoice Furnishing Facility (IFF), which allows them to upload their B2B invoices on a monthly basis. This helps buyers avail ITC faster, as the details of the invoices are uploaded before the due date for filing GSTR-1.

Benefits of the QRMP Scheme

The QRMP scheme offers several advantages for small and medium businesses under GST:

  1. Reduced Compliance Burden: By filing returns only on a quarterly basis, businesses can save time and resources. This reduces the frequency of GST filings, making the process less cumbersome for smaller businesses.

  2. Improved Cash Flow: While the returns are filed quarterly, businesses need to make tax payments monthly, which can be calculated based on their quarterly turnover and the previous month's payments. This allows better cash flow management as it reduces the pressure of making larger, lump-sum payments.

  3. Flexibility: The QRMP scheme offers businesses the flexibility to switch between quarterly and monthly filing based on their changing turnover, giving them greater control over their tax compliance.

  4. Simplicity: The QRMP scheme simplifies the GST filing process, as businesses are required to file only one return (GSTR-1) for the entire quarter instead of filing it monthly.

  5. Timely ITC Claim: By using the Invoice Furnishing Facility (IFF), businesses can upload invoices on a monthly basis, ensuring that their buyers can claim Input Tax Credit (ITC) on time.

How to Opt for the QRMP Scheme?

Businesses that meet the eligibility criteria can opt for the QRMP scheme through the GST portal. Here’s how to do it:

  1. Login to the GST Portal:
    Visit the official GST portal (www.gst.gov.in) and log in using your GSTIN, username, and password.

  2. Navigate to the 'Services' Tab:
    On the dashboard, go to the ‘Services’ tab, select ‘Returns’, and then select ‘Opt for QRMP Scheme’.

  3. Select the Scheme:
    You will be presented with the option to opt for the QRMP scheme. Select ‘Yes’ and confirm the selection.

  4. Start Filing Quarterly Returns:
    After opting for the QRMP scheme, businesses will be able to file GSTR-1 and GSTR-3B on a quarterly basis, and make monthly payments through GST PMT-06.

When to Exit the QRMP Scheme?

Taxpayers can exit the QRMP scheme at any time by opting for the monthly return filing system. However, the following scenarios may also prompt a change in the filing frequency:

  1. Increase in Turnover: If the business exceeds the turnover threshold of Rs. 5 crore in a financial year, it must switch to the regular monthly filing system.

  2. Voluntary Exit: Businesses may choose to exit the QRMP scheme voluntarily if they find it more beneficial to file returns monthly.

  3. System-driven Exit: The GST system may automatically exit a taxpayer from the scheme if certain conditions are violated or if turnover exceeds the threshold limit.

Conclusion

The QRMP scheme under GST is an excellent step towards simplifying tax compliance for small businesses in India. By allowing quarterly return filing and monthly payments, the scheme reduces the burden on businesses while ensuring timely tax payments.

With the added flexibility to choose between quarterly or monthly filing, businesses can manage their cash flow better and comply with the GST system in an efficient and streamlined manner.

If you're eligible for the QRMP scheme, it's definitely worth considering as it could save you both time and resources. Stay updated on your turnover status and make the best choice for your business.

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