QRMP Scheme Under GST – A Simple Guide for Small Taxpayers
What is QRMP Scheme Under GST?
The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme is a GST compliance scheme introduced to help small taxpayers reduce their return filing burden. Under this scheme, eligible taxpayers can file GST returns quarterly while paying their tax liability on a monthly basis. The main objective of QRMP is to simplify GST compliance and save time for small businesses.
Who Can Opt for the QRMP Scheme?
A taxpayer can opt for the QRMP Scheme if they satisfy the following criteria:
- The taxpayer has an aggregate annual turnover of up to ₹5 crore in the previous financial year.
- The taxpayer has filed the required GST returns within the prescribed time.
- The taxpayer is registered under GST and is eligible to file Form GSTR-1 and GSTR-3B.
How Does the QRMP Scheme Work?
Under the QRMP scheme, compliance is structured as follows:
- Taxpayers file GSTR-1 and GSTR-3B quarterly instead of monthly.
- GST liability is paid every month through a payment mechanism.
- Taxpayers need to pay the first two months' tax liability of the quarter using Form PMT-06.
Practical Example: April-June Quarter
If a taxpayer chooses the April-June quarter, the payment and filing schedule is:
- April tax payment: Through PMT-06 in May.
- May tax payment: Through PMT-06 in June.
- Quarterly GSTR-1 and GSTR-3B: Filed after the end of June.
Benefits of QRMP Scheme
The QRMP scheme provides several benefits to small taxpayers:
1 Reduced Compliance
Businesses need to file GST returns only four times a year instead of twelve times, significantly easing paperwork.
2 Saves Time and Effort
Less frequent return filing reduces accounting work and compliance-related administration activities.
3 Better Cash Flow
Small businesses get more flexibility in managing their tax payments and operations throughout the quarter.
4 Invoice Upload Facility
Taxpayers can upload invoices monthly through the Invoice Furnishing Facility (IFF) to help their customers claim ITC.
Invoice Furnishing Facility (IFF) Under QRMP
The Invoice Furnishing Facility (IFF) is an optional facility available to QRMP taxpayers. Through IFF, taxpayers can upload details of selected B2B invoices for the first two months of each quarter. This helps recipients receive Input Tax Credit (ITC) without waiting for the supplier's quarterly GSTR-1 filing.
Payment of Tax Under QRMP
QRMP taxpayers can pay their monthly GST liability through two methods:
1. Fixed Sum Method (FSM)
Under this method, the taxpayer pays a pre-calculated, fixed amount based on their previous tax liability, simplifying the monthly tax calculations.
2. Self-Assessment Method (SAM)
Under this method, the taxpayer calculates their actual tax liability based on the inward and outward supplies of that month and pays accordingly.
Return Filing Under QRMP
QRMP taxpayers are required to file the following returns:
- Form GSTR-1 – Quarterly return for outward supplies.
- Form GSTR-3B – Quarterly summary return and payment of tax.
Returns must be filed within the prescribed due dates to avoid interest and penalties.
How to Opt for QRMP Scheme?
Eligible taxpayers can opt for the QRMP scheme through the GST portal by following these steps:
- Login to the GST portal using your credentials.
- Go to the Services section.
- Select Returns and choose the Opt for Quarterly Return (QRMP) option.
- Select the preferred financial year and quarter, and confirm your choice.
Important Points to Remember
- QRMP is optional; eligible taxpayers can choose whether to opt for it or continue with monthly filings.
- The scheme is available only for taxpayers with turnover up to ₹5 crore.
- Monthly tax payment is still required, even though the returns are quarterly.
- IFF is optional and mainly useful for businesses dealing with B2B customers.
- Timely payment and return filing are necessary to avoid interest and late fees.
Common Mistakes Under QRMP Scheme
Businesses should avoid the following common pitfalls:
- Missing monthly tax payments or delayed challan creation.
- Incorrect calculation of GST liability under the self-assessment method.
- Delayed filing of quarterly returns resulting in penalties.
- Not uploading invoices properly through IFF when dealing with B2B clients.
- Ignoring reconciliation of sales and purchase records (GSTR-2B reconciliation).
Input Tax Credit (ITC) Claims under QRMP Scheme
Under the QRMP Scheme, taxpayers can claim Input Tax Credit (ITC) on eligible purchases and expenses, subject to the normal conditions of GST law. Key points to keep in mind include:
- ITC can be claimed only on valid tax invoices or eligible import documents.
- ITC is available only if goods or services are received and used for business purposes.
- The supplier must upload invoice details in GSTR-1/IFF, which will reflect in the recipient’s GSTR-2B.
- Taxpayers under QRMP can claim ITC based on the details available in their auto-drafted GSTR-2B statement.
- ITC cannot be claimed on blocked credits under Section 17(5) of the CGST Act (e.g., personal consumption, motor vehicles, club memberships).
- Proper reconciliation of purchase records with GSTR-2B should be done before claiming ITC to avoid warnings or mismatches.
Conclusion
The QRMP Scheme under GST is a highly beneficial initiative for small taxpayers as it significantly reduces compliance work while maintaining regular tax payments. By allowing quarterly return filing and monthly tax payments, the scheme provides convenience, better cash flow and time management, and easier GST compliance for small businesses.
Businesses should fully understand the scheme rules, maintain proper books of accounts, and file returns on time to take full advantage of the QRMP scheme. For specialized help with GST filing, reach out to our team.