In the GST taxation system, a significant development has been the introduction to QRMP scheme. This scheme, standing for Quarterly Return Monthly Payment, is designed to simplify the GST compliance process for small and medium businesses. By understanding QRMP in GST, businesses can manage their tax liabilities more effectively and efficiently. The QRMP scheme offers a balanced approach to filing returns and making tax payments, tailored specifically for businesses with a certain turnover range. This Introduction to QRMP scheme will cover its definition, eligibility, and operational framework, offering a clear QRMP overview for business owners.
Definition and Overview of QRMP
The definition of QRMP, or Quarterly Return Monthly Payment, lies in its dual approach to GST compliance. This scheme allows eligible taxpayers to file their Form GSTR-1 and Form GSTR-3B returns on a quarterly basis while enabling them to pay their tax dues monthly through a challan. It’s a strategic initiative to ease the compliance burden for smaller businesses, ensuring they remain compliant with their GST obligations without the stress of monthly detailed filings.
Table: QRMP Scheme at a Glance
|Quarterly Return Monthly Payment (QRMP)
|To simplify GST filing for eligible taxpayers
|Tax Return Filing
|Quarterly (Form GSTR-1 and Form GSTR-3B)
|Monthly through challan
Eligibility Criteria for QRMP Scheme
Understanding who can benefit from the QRMP scheme is crucial. The eligibility for this scheme is primarily based on a business’s annual aggregate turnover. To opt for the QRMP scheme, taxpayers must have an aggregate annual turnover of up to ₹5 Crore in the current financial year and the preceding financial year. Additionally, they must have filed their last due Form GSTR-3B return. For instance, if a taxpayer’s annual aggregate turnover was less than or up to ₹5 Crore in the previous financial year and they have filed Form GSTR-3B for the period ending June 2021 by July 31, 2021, they qualify for this scheme. Understanding QRMP in GST starts with recognizing if your business fits within these criteria.
Exclusions from the QRMP Scheme
While the QRMP scheme in GST is beneficial for many, it’s important to understand that not all taxpayers are eligible. This exclusion primarily concerns businesses whose annual aggregate turnover exceeds ₹5 Crores. Additionally, the scheme is not available to taxpayers who are not required to file Form GSTR-1 and Form GSTR-3B returns. This includes certain specific categories of taxpayers such as non-resident taxable persons and input service distributors. Understanding QRMP in GST involves recognizing not only who can opt in but also who is necessarily excluded, ensuring businesses accurately assess their eligibility.
Table: Exclusions from QRMP Scheme
|Eligibility for QRMP
|Annual Turnover Above ₹5 Crores
|Non-resident Taxable Persons
|Input Service Distributors
Preconditions for Opting for QRMP
Opting for the QRMP scheme requires fulfilling certain preconditions. A taxpayer must be registered as a regular taxpayer or should have opted out of the composition scheme. Additionally, having a valid User ID and password for the GST portal is mandatory. The annual aggregate turnover in the current and preceding financial year must be up to ₹5 Crores, and the most recent Form GSTR-3B return must have been filed. Understanding QRMP in GST also means ensuring there is no data saved in Form GSTR-1 for the period for which the taxpayer is opting for the QRMP scheme.
Table: Preconditions for Opting for QRMP
|Regular Taxpayer/ Opted out of Composition Scheme
|GST Portal Access
|Valid User ID and Password
|Up to ₹5 Crores in current and preceding FY
|Form GSTR-3B Filing
|Most recent return filed
|Form GSTR-1 Data
|No data saved for the applicable period
Introduction to Invoice Furnishing Facility (IFF)
The Invoice Furnishing Facility (IFF) is a key component of the QRMP scheme. It allows taxpayers who have opted for QRMP to declare their outward supplies to a registered person for the first two months of any quarter. It’s an optional facility, akin to Form GSTR-1, but is limited to filing only B2B invoices, credit notes, and debit notes. The last date for filing IFF for a month is the 13th of the following month. This facility aids in the smooth flow of input tax credit for recipient taxpayers, aligning with the basics of QRMP in GST.
Table: Invoice Furnishing Facility (IFF) Overview
|Optional for first two months of a quarter
|13th of the following month
|Only B2B invoices, credit notes, debit notes
|Facilitates smooth flow of input tax credit
Procedure to Opt-In or Opt-Out of QRMP
Deciding whether to opt in or out of the QRMP scheme is a crucial decision for eligible taxpayers. To make this choice, one needs to log in to the GST portal using valid credentials. Navigate to Services > Returns > Opt-in for Quarterly Return, where you can select your preference. It’s important to note that this decision isn’t set in stone; taxpayers have the flexibility to switch between the QRMP scheme and regular filing based on their business needs. Understanding QRMP in GST means knowing how to navigate these options to optimize tax compliance.
Migration to QRMP for Existing Taxpayers
For taxpayers already registered under GST, migration to the QRMP scheme is largely automated, based on their annual aggregate turnover. As part of the QRMP overview, it’s important to note that for the quarter January-March 2021, taxpayers whose turnover was up to ₹5 Crores in FY 2019-20 and who filed their Form GSTR-3B for October 2020 by November 30, 2020, were automatically enrolled in the scheme. This automatic migration simplifies the transition for eligible taxpayers, making the basics of QRMP in GST more accessible.
Quarterly Filing Under QRMP: GSTR-1 and GSTR-3B
Opting for the QRMP scheme modifies the frequency of filing certain GST returns. Taxpayers under this scheme file their Form GSTR-1 and Form GSTR-3B on a quarterly basis. However, it’s essential to understand that while the return filing is quarterly, the tax payment is still required monthly. This unique feature of the QRMP scheme provides a balance between easing the filing burden and ensuring regular tax payments. Explaining Quarterly Return Monthly Payment in practical terms means recognizing this balance in compliance duties.
Table: Filing Frequency Under QRMP
QRMP for New Taxpayers
Newly registered taxpayers face a unique situation when it comes to the QRMP scheme. The decision to opt for this scheme depends on the date of their GST registration. Those registered at the beginning of a quarter can opt for the QRMP scheme immediately. However, if registration occurs in the latter two months of a quarter, they can only opt for the QRMP scheme from the next quarter onwards. This arrangement ensures that new businesses have the time to understand and adapt to the basics of QRMP in GST before making a commitment to the scheme.
Continuity and Revision of QRMP Option
Once a taxpayer opts for the QRMP scheme, the choice continues for subsequent quarters unless a revision is made. This means that if you select QRMP for a particular quarter, you don’t need to choose again for the following quarter; your choice is automatically carried forward. This feature simplifies the process, reducing the need for constant decision-making every quarter. However, taxpayers always have the option to revise their choice if their circumstances or preferences change. Understanding QRMP in GST includes knowing how to maintain or change your filing preferences as your business needs evolve.
Impact of Exceeding AATO on QRMP Eligibility
One critical aspect of the QRMP scheme is the impact of your annual aggregate turnover (AATO) on eligibility. If at any point during the financial year, a taxpayer’s AATO exceeds ₹5 Crores, they will no longer be eligible for the QRMP scheme. In such cases, the taxpayer must switch back to the regular GST filing process. This rule ensures that the QRMP scheme remains targeted towards smaller businesses, aligning with its objective of simplifying GST compliance for this segment. Thus, keeping a close watch on your turnover is a key part of understanding QRMP in GST.
Table: AATO Impact on QRMP Eligibility
|AATO During FY
|Up to ₹5 Crores
|Exceeds ₹5 Crores
Advantages of Opting for QRMP
The QRMP scheme offers several advantages, particularly for small and medium-sized enterprises (SMEs). By allowing quarterly returns while making monthly tax payments, the scheme reduces the compliance burden significantly. This setup is especially beneficial for businesses with limited resources to handle frequent filings. Moreover, the flexibility to choose between monthly and quarterly filing under QRMP ensures that businesses can select the option that best suits their operational rhythm. Understanding QRMP in GST is about recognizing how it can make GST compliance more manageable and less time-consuming for eligible businesses.
Challenges and Considerations
While QRMP offers several benefits, it’s also important to consider potential challenges. One key consideration is staying diligent with monthly tax payments, as failing to do so can lead to penalties and interest charges. Additionally, businesses need to keep a close watch on their turnover, as exceeding the ₹5 Crore threshold will necessitate a switch back to the regular filing process. Understanding QRMP in GST involves balancing its benefits with these responsibilities and ensuring that your business can comfortably meet the scheme’s requirements.
Table: Challenges and Considerations in QRMP
|Monthly Tax Payments
|Consistent monitoring and payment of monthly tax dues
|Regular check on turnover to ensure continued eligibility
The QRMP scheme represents a significant step towards simplifying GST compliance for SMEs. By offering a blend of quarterly return filing with monthly tax payments, it eases the compliance burden while ensuring timely tax collections. Understanding QRMP in GST is crucial for small and medium businesses to take full advantage of this scheme. As with any tax scheme, there are nuances and criterias to consider, but for those who fit within its parameters, QRMP can be very beneficial for managing GST obligations.
Frequently Asked Questions (FAQs)
What is the definition of QRMP in GST?
QRMP stands for Quarterly Return Monthly Payment. It’s a scheme in GST allowing eligible taxpayers to file returns quarterly while paying taxes monthly, simplifying compliance for small businesses.
Can you provide a basic overview of the QRMP scheme?
The QRMP scheme enables taxpayers with turnover up to ₹5 Crores to file GSTR-1 and GSTR-3B quarterly. However, tax payments are still made every month, balancing compliance ease with regular tax collection.
How does the QRMP scheme simplify GST filing?
By allowing quarterly filing of returns, QRMP reduces the frequency of GST compliance tasks, making it simpler for businesses to manage their GST obligations along with their regular operations.
Who is eligible for the QRMP scheme?
Taxpayers with an annual aggregate turnover of up to ₹5 Crores in the current and previous financial year are eligible for the QRMP scheme, as long as they have filed their last due GSTR-3B.
What is the process of opting in or out of the QRMP scheme?
Taxpayers can opt in or out of the QRMP scheme via the GST portal under the ‘Services’ > ‘Returns’ > ‘Opt-in for Quarterly Return’ section, providing flexibility in compliance choices.
Does opting for QRMP change my tax payment frequency?
While QRMP changes return filing to quarterly, tax payments still need to be made monthly, ensuring a steady flow of tax revenues to the government and manageable outflows for businesses.
Can new businesses opt for the QRMP scheme immediately?
New registrants can opt for QRMP from the beginning of the quarter if registered in the first month, otherwise from the next quarter, easing their initial GST compliance journey.
What happens if my business exceeds the QRMP turnover threshold?
If your turnover exceeds ₹5 Crores, you’ll need to switch back to regular monthly GST filing, as QRMP is designed specifically for smaller businesses with lower turnovers.
Is the Invoice Furnishing Facility (IFF) part of QRMP?
Yes, the IFF allows QRMP participants to upload B2B invoices monthly for the first two months of each quarter, aiding in the timely availment of ITC by recipients.
Are there any key deadlines to remember in QRMP?
Yes, under QRMP, GSTR-1 and GSTR-3B are filed quarterly, but keep an eye on monthly tax payment deadlines and the 13th of the following month for IFF submissions.