Quarterly Return Monthly Payment (QRMP) Scheme in GST

QRMP scheme provides relief to small taxpayers and is a part of the “Ease of Doing Business”. CBIC (Central Board of Indirect Taxes and Customs) has introduced the QRMP Scheme under GST w.e.f 01/01/2021 in its GST council meeting via QRMP scheme notification as of 10.11.2020. The QRMP scheme full form is "Quarterly Return Monthly Payment Scheme". Those taxpayers having aggregate turnover up to 5 crore in the preceding Financial Year can avail the benefits of the QRMP scheme.

The taxpayers registered under the QRMP scheme are allowed to furnish returns on a quarterly basis along with monthly GST payments of taxes. There is a lot of difference between QRMP and Composition scheme. The QRMP scheme limit is 5 crore whereas the Composition scheme limit is 1.5 crore/75 lakh depending upon the area. The QRMP scheme due date for filing Quarterly GSTR 3B is the 22nd or 24th of the succeeding month whereas the composition scheme due date for CMP-08 is the 18th of the succeeding month.

Eligibility Criteria for QRMP Scheme.

As we have understood the QRMP scheme meaning let's understand the QRMP scheme eligibility. A taxpayer registered under GST having an aggregate turnover of up to Rs.5 crore in the preceding financial year who is required to furnish a return in GSTR-3B, is eligible to opt for the QRMP scheme. In a case where the aggregate turnover in any quarter during the current financial year exceeds Rs.5 crore, the taxpayer shall not be eligible for the scheme from the next quarter onwards.

The aggregate annual turnover for the preceding financial year is required to be calculated after taking into account the details furnished in the GST returns filed by the taxpayer in the preceding financial year.

How to Avail the QRMP Scheme?

To avail of the QRMP scheme taxpayers need to go through the following steps:

• Step 1: Log in to GST Portal (www.gst.gov.in) with GST ID and Password
• Step 2: Go to the “Services” section and then click on ”Returns”
• Step 3: Under the Returns section you will find "Opt-in for quarterly return" and Click on it to opt for the scheme.
• Step 4: Choose the Financial Year and Click on “Search”.
• Step 5: Under frequency, Choose the Quarterly option and then Click on “Save”.

To avail of the option of the GST QRMP scheme and file GSTR 3B quarterly, a registered taxpayer has to indicate his intention on the GST portal between 1st day of the second month of the preceding quarter and the last day of the first month of the quarter in which QRMP scheme is to be opted.

Example - Mr X wants to opt for the QRMP scheme in the quarter of Oct-Dec 2024, so he should have opted for it on the GST portal between the 1st of August 2024 and the 31st of Oct 2024.

What is the Time Limit for Availing the QRMP Scheme?

To avail of the benefits of the QRMP scheme under GST taxpayers need to indicate on the GST common portal between 1st day of the second month of the preceding quarter and the last day of the first month of the quarter in which the QRMP scheme is to be opted for. Once the QRMP scheme is availed the taxpayer needs to continue to furnish returns on a quarterly basis and pay taxes on a monthly basis until he becomes ineligible to stay in the QRMP scheme.

Deemed Monthly/ Quarterly Filing of GSTR-3B

Until now we have seen the procedure that needs to be followed to avail of the QRMP scheme. However, if a registered taxpayer falls in the categories mentioned below and has filed their GSTR-3B say, for Jan 2024 by 20th February 2024, it shall be deemed that they have opted for monthly or quarterly filing as detailed below -

How QRMP Dealers Can Submit Details of Outward Supplies?

The taxpayers opting for the QRMP scheme have to furnish GSTR 1 quarterly and for that purpose, they can use Invoice Furnishing Facility (IFF) which allows the taxpayers to upload the invoices monthly. 

The following things need to be considered while using IFF.

1. A registered person has the option of using an Invoice Furnishing Facility (IFF) only for the first and second months of a quarter to furnish the details of such outward supplies.

2. The IFF is available to be utilised only between the 1st day of the succeeding month and the 13th day of the succeeding month.

3. The details of invoices furnished using the IFF in the first two months are not required to be furnished again in FORM GSTR-1. The facility of IFF has been provided only for such supplies that are duly reflected in the FORM GSTR-2A and FORM GSTR-2B of the concerned recipient. 

4. It is to be noted that IFF is an optional facility, a registered person may choose to furnish the details of outward supplies using FORM GSTR-1.

How to Make Monthly Payments of Tax Under the QRMP Scheme?

A taxpayer registered under the QRMP scheme would be required to pay the tax using Form GST PMT-06 in each of the first two months of the quarter by the 25th of the following month.

There are two methods for paying taxes under the QRMP scheme namely.

Fixed sum Method(FSM) and Self Assessment Method(SAM). The taxpayer has the option to use either of the two methods for paying taxes.

Fixed Sum Method

Under this method, the GST portal auto-populates a challan for GST PMT-06 for an amount equal to 35% of the tax paid in cash in the preceding quarter (where the return was filed every quarter) and 100% of taxes paid in cash in the last month of the immediately preceding quarter (if the return was filed on monthly basis).

Self Assessment Method (SAM)

Under this method, the taxpayer has to ascertain actual tax liability himself after considering his outward and inward supplies after deducting the Input Tax Credit and any balance available in the Electronic Cash/ Credit Ledger as per FORM GST PMT-06. To facilitate the taxpayer in the ascertainment of the ITC available for the month, an auto-drafted input tax credit statement has been made available on the GST common portal in FORM GSTR-2B, for every month. 

When QRMP Dealers Compulsorily Need to File Monthly GST Returns?

Once the QRMP scheme is opted for, the taxpayer will have to continue to furnish returns quarterly for all future quarters, except in the situations mentioned below:

• When a taxpayer becomes ineligible to furnish GST quarterly return due to GST quarterly return turnover limit crossing 5 crore during any quarter. In such a case, he is required to file GSTR 3B on a monthly basis.

• If the most recent return, which was due while choosing the quarterly filing option, hasn't been filed, the taxpayer won't be able to continue with the QRMP scheme.

How to Claim ITC Under the QRMP Scheme?

The procedure for claiming ITC under the QRMP scheme GST is the same as in regular return. The taxpayer registered under QRMP and using the Self Assessment Method for making monthly payment of taxes in the first two months of the quarter can avail ITC as per their GSTR-2B for the month and they can pay the balance as cash towards the GST liability accordingly.

However, the buyers who deal with the vendors under the QRMP scheme GST will need to refer to quarterly GSTR-2B for ITC claims as the GSTR-2B for the quarter gets generated on the 14th of the month following the quarter after the filing of GSTR-1.

What Are the Key Challenges or Issues Under the QRMP Scheme?

The QRMP scheme is aimed at reducing the compliance burden for taxpayers registered under GST. 

However, there are some challenges that this scheme poses to the taxpayers and they are as follows:

• Whether to opt for QRMP or not has to be decided for every GSTIN of a business(PAN) which is a time-consuming process.

• If a taxpayer opting for the QRMP scheme uses the Invoice Furnishing Facility(IFF), segregation of B2B and non-B2B invoices needs to be done which can be avoided if oped for normal filing.

• Due to using IFF, the reconciliation of IFF, sales register and GSTR-1 becomes essential which increases workload.

• The taxpayer under the QRMP scheme GST also has to choose between the Fixed Sum Method and the Self-assessment Method every month.

What Are the Other Key Considerations for the QRMP Scheme?

Applicability of Interest Under the QRMP Scheme

Following is the applicability of interest under the QRMP scheme based on the method of payment of taxes opted by the taxpayer:

Fixed Sum Method: Under FSM, the interest on late payment of tax will be at the rate of 18% p.a. However no interest is payable if the taxpayer has paid the tax due in the first 2 months of the quarter within 25th of the following month. If the payment is not done within the due date, Interest will be applicable from the QRMP due date of making such payment i.e. 26th of the following month till the date of actual payment.

Self-Assessment Method: Under SAM also the interest on late payment of tax will be at the rate of 18% p.a.
Please note that the Interest amount would be payable for tax or any part thereof after adjusting ITC which remains unpaid or is paid after the due date for the first two months of the quarter.

Late Fee Under QRMP Scheme

Following is the late fee applicable for delay in furnishing GSTR, subject to a maximum penalty of Rs. 5,000.

Due Dates for Filing Quarterly GSTR-3B

Taxpayers registered under the QRMP scheme are required to furnish FORM GSTR-3B, for each quarter, on or before the 22nd or 24th day of the month succeeding such quarter. Further, they need to declare the supplies made and ITC availed during the quarter and all other details required to be furnished. The amount deposited by the taxpayer in the first two months shall be used only for the purposes of netting off the liability furnished in FORM GSTR-3B of that quarter.

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