Quarterly Return Filing & Monthly Payment of Taxes (QRMP) Scheme under GST

What is the QRMP system?

QRMP stands for Quarterly Return filing and Monthly Payment of Taxes under GST. It is a scheme introduced by the Government of India for small taxpayers with an annual turnover of up to Rs. 5 crores. Under this scheme, taxpayers can file their GSTR-1 and GSTR-3B returns quarterly instead of monthly. However, payment of taxes must be made monthly. The QRMP scheme allows small taxpayers to reduce their compliance burden and gives them more time to focus on their business. The system is optional; taxpayers can opt in or out at the beginning of each quarter.

Under the QRMP scheme, taxpayers must enter their invoice data for the first two months of the quarter into IFF (Invoice Furnishing Facility), which was newly introduced under the GST. By doing so, taxpayers can claim an input tax deduction, and their buyers can claim a credit for the taxes paid on their purchases. The IFF must be filed by the 13th of the following month, and the GSTR-1 return for the entire quarter must be filed by the 31st of the month following the end of the quarter.

It is important to note that the QRMP rule does not apply to taxpayers who have elected the composition rule or those registered as input service distributors. In addition, taxpayers who have registered for GST in the current fiscal year cannot opt for the QRMP regime in the first year of their registration.

Why is the QRMP system important?

The QRMP scheme is important for small taxpayers with an annual turnover of up to Rs. 5 crores for the following reasons:

Reduced compliance burden: 

Under the QRMP scheme, small taxpayers can file their GSTR-1 and GSTR-3B returns quarterly instead of monthly. This reduces the compliance burden and allows them to focus on their business.

Improved cash flow: 

The scheme provides for a monthly payment of taxes, which helps small taxpayers better manage their cash flow.

Input tax credit: 

Under the QRMP scheme, taxpayers can submit their billing details for the first two months of the quarter in the IFF (Invoice Furnishing Facility), which allows them to claim an input tax credit and their buyers to receive a credit for the taxes paid on their purchases.

Lower interest and penalties: 

By complying with the QRMP rule, small taxpayers can avoid interest and penalties for filing tax returns late or paying taxes late.

Flexibility: 

The QRMP system is optional, and taxpayers can opt in or out of the system at the beginning of each quarter. This gives them the flexibility to decide whether or not the system is beneficial to them.

Overall, the QRMP scheme is important because it reduces compliance burden and improves cash flow for small taxpayers, allowing them to claim an input tax deduction and avoid penalties for non-compliance.

Criteria for the QRMP system:

The QRMP scheme applies to small taxpayers with annual sales of up to Rs. 5 crores in the previous fiscal year. However, certain categories of taxpayers are not eligible for this scheme, such as:

• Taxpayers registered under the Composition Scheme.
• Non-resident taxpayers.
• Taxpayers registered as input service distributors.
• Taxpayers who have not filed a tax return for the last two consecutive quarters.

The following are the eligibility criteria for the QRMP scheme:

• Taxpayers must opt-in at the beginning of the quarter. Once exercised, the option will continue for future periods unless the taxpayer elects not to opt-in.
• Taxpayers must submit their billing information for the first two months of the quarter to the Invoice Furnishing Facility (IFF).
• The IFF must be submitted by the 13th of the following month.
• Taxpayers must pay taxes monthly by the 25th of the following month. Payment can be made by wire transfer or with the automatically generated remittance summary.
• Taxpayers must submit the GSTR-1 return for the entire quarter by the 31st of the month following the end of the quarter.

It is important to note that taxpayers who registered for GST in the current fiscal year cannot opt into the QRMP programme in their first year of registration.

How to take advantage of the QRMP programme

Taxpayers who are eligible for the QRMP programme may enrol in the programme at the beginning of each quarter by following the steps below:

• Log in to the GST portal with valid credentials.
• Go to the ‘Services’ tab and select the ‘Opt-in for Quarterly Return’ option.
• Select the tax return filing period for which the taxpayer would like to use the QRMP programme.
• After selecting the period, the taxpayer can preview the details and submit the form.
• Once submitted, the taxpayer cannot change the option for the quarter.
• If the taxpayer has chosen to use the QRMP programme, they must submit their billing details for the first two months of the quarter in the Invoice Furnishing Facility (IFF).
• The IFF must be submitted by the 13th of the following month.
• Taxpayers must pay taxes monthly by the 25th of the following month.
• Taxpayers must file the GSTR-1 return for the entire quarter by the 31st of the month following the end of the quarter.

It should be noted that taxpayers who registered for GST in the current fiscal year cannot opt for the QRMP programme in the first year of their registration. In addition, once a taxpayer has opted into the scheme for a particular quarter, they cannot opt out of the scheme for that quarter.

When should you take advantage of the QRMP programme and file your tax return?

Taxpayers may enrol in the QRMP programme at the beginning of each quarter: January, April, July, and October. Once a taxpayer has opted into the QRMP programme for a quarter, they must continue in the programme for the remaining quarters of the fiscal year unless they choose to opt-out.

The following are the due dates for filing tax returns under the QRMP programme:

Monthly Payment Dates: 

Taxpayers must pay taxes monthly by the 25th of the following month. For example, taxes for January must be paid by February 25.

Due dates for bills (IFF): 

Taxpayers must submit their billing information for the first two months of the quarter to the Invoice Furnishing Facility (IFF). The IFF must be submitted by the 13th of the following month. For example, the IFF for January and February must be submitted by March 13.

GSTR-1 Due Date: 

Taxpayers must file the GSTR-1 return for the entire quarter by the 31st of the month following the end of the quarter. For example, the GSTR-1 return for the quarter from January to March must be filed by April 31.

It is important to note that the above, due dates are subject to change, and taxpayers should check the official GST portal for any updates or changes to the due dates.

Payment of taxes under the QRMP scheme

Under the QRMP scheme, taxpayers must pay taxes monthly by the 25th of the following month. For example, taxes for January must be paid by February 25. Taxes can be paid through the GST portal by following the steps below:

• Log in to the GST portal with valid credentials.
• Go to the ‘Services’ tab and select the ‘Payments’ option.
• Select the appropriate tax types (i.e. CGST, SGST, IGST or any other tax) and enter the amount paid for each type.
• Select the payment method and make the payment.
• After successful payment, the taxpayer will receive a payment confirmation.

It is important to note that taxpayers who have opted for the QRMP scheme must pay the taxes monthly, even if they have yet to make any sales in that month. If the taxpayer does not pay the taxes within the due date, they must pay interest and late payment penalties on the outstanding amount. Therefore, taxpayers should pay taxes on time to avoid penalties and interest.