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May 16, 2024

Step-by-Step Guide to the QRMP Scheme: Making GST Filing Easier for Small Businesses

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Shebi Sharma

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Introduced to ease the compliance burden, the Quarterly Return Monthly Payment (QRMP) Scheme is a strategic initiative that allows eligible taxpayers to file GST returns quarterly while making tax payments monthly.

At its core, the QRMP Scheme is designed to benefit small taxpayers by reducing return filing frequency, thereby saving time and reducing compliance costs. It’s a thoughtful approach to tax administration, aligning with the needs of businesses that require agility and flexibility in managing their financial obligations.

For small businesses, the QRMP scheme simplifies tax payments and reduces the monthly compliance burden. This balanced approach frees up time to focus on running the business.

How Monthly Payment of Tax is Done in the QRMP Scheme

For small taxpayers, the QRMP Scheme provides a simplified method of paying taxes while navigating the GST ecosystem. During the first two months of the quarter, taxpayers have the flexibility to choose between two distinct methods for tax payment: the Fixed Sum Method (FSM) and the Self-Assessment Method (SAM).

Fixed Sum Method (FSM)

Under the FSM, also known as the 35% Challan Method, taxpayers can pay a fixed sum based on a pre-calculated amount. This amount is equivalent to 35% of the tax paid in the previous quarter if the last return was filed quarterly, or an equal split of the tax paid in the last month of the previous quarter if the last return was filed monthly. The FSM simplifies the payment process, providing a hassle-free option for taxpayers.

Self-Assessment Method (SAM)

The SAM, on the other hand, allows taxpayers to pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit available. Taxpayers using SAM need to assess their tax liability for each month and make payments accordingly. This method offers precision and is suited for those who prefer a detailed monthly assessment.

Steps to Make the Payment Using Form GST PMT-06

  1. Login to the GST Portal: Access the GST portal and navigate to the ‘Services’ tab.

  2. Select Payment: Under the ‘Services’ menu, click on ‘Payments’ and then select ‘Create Challan’.

  3. Choose the Tax Period: Specify the relevant month for which the payment is being made.

  4. Select Payment Method: Choose between FSM or SAM for the tax payment.

  5. Fill in the Details: Enter the tax amounts under the respective heads (CGST, SGST, IGST, and Cess).

  6. Generate Challan: After entering the details, click on ‘Generate Challan’.

  7. Make Payment: Complete the payment process using the generated challan through the preferred mode of payment (Net Banking, Over-the-counter, NEFT/RTGS).

By following these steps, taxpayers can efficiently fulfill their monthly tax obligations under the QRMP Scheme, ensuring compliance and peace of mind.

Also Read: Mastering Multi-Branch GST Registration in India: Guide for Businesses with Multiple GSTINs

Invoice Furnishing Facility (IFF) in QRMP Scheme

The Invoice Furnishing Facility (IFF) is a feature of the QRMP Scheme that serves as a boon for taxpayers who wish to maintain a steady flow of input tax credit (ITC) to their recipients. In essence, it's a system that lets qualified taxpayers upload invoices monthly, even if they file their taxes quarterly.

Definition and Purpose of IFF

The IFF is an optional facility that enables taxpayers to upload the details of their outward supplies to registered persons (B2B) for the first two months of a quarter. The purpose of the IFF is to help businesses pass on the ITC benefits to their buyers without waiting for the quarterly return filing, thus avoiding any working capital blockage.

How IFF Benefits Taxpayers

  • Timely ITC to Recipients: Buyers can claim ITC in the same month, aiding in better cash flow management.

  • Reduction in Compliance Burden: Taxpayers can avoid the last-minute rush and errors associated with quarterly filing.

  • Flexibility: Offers the choice to furnish invoices monthly or cumulatively at the end of the quarter.

Process and Deadlines for Uploading Invoices Using IFF

  1. Access the GST Portal: Log in to the GST portal with your credentials.

  2. Navigate to IFF Section: Go to the ‘Returns Dashboard’ and select the ‘Invoice Furnishing Facility’ option.

  3. Upload Invoices: Enter the details of the B2B invoices or use the offline tool to upload the invoice data.

  4. Submit the Details: After uploading, verify the accuracy of the details and submit them.

  5. Deadlines: The IFF can be used from the 1st to the 13th of the month following the month for which the details are to be uploaded. For example, for January’s invoices, the IFF can be used from February 1st to 13th.

By incorporating the IFF into their GST compliance routine, taxpayers under the QRMP Scheme can ensure a seamless flow of ITC and maintain consistent compliance without the pressure of monthly returns.

How to Opt for the QRMP Scheme

The QRMP (Quarterly Return Monthly Payment) Scheme is a facilitative measure under the GST framework designed to ease the compliance burden for small taxpayers. Here’s how you can opt for this scheme:

Eligibility Criteria for Opting into the QRMP Scheme

To be eligible for the QRMP Scheme, a taxpayer must fulfill the following conditions:

  • Must be registered as a regular taxpayer or have opted out of the composition scheme.

  • Must have an annual aggregate turnover (AATO) of up to ₹5 Crore in the current and preceding financial year.

  • Certain categories of taxpayers, such as non-resident taxable persons, casual taxable persons, or Input Service Distributors, are not eligible for the QRMP scheme.

Step-by-Step Guide on How to Opt-In Through the GST Portal

  1. Login to the GST Portal: Use your valid credentials to log in.

  2. Navigate to Services: Go to ‘Services’ > ‘Returns’ > ‘Opt-in for Quarterly Return’.

  3. Select the Financial Year: Choose the financial year for which you want to opt in.

  4. Choose the Quarter: Select the quarter for which you want to opt for the QRMP scheme.

  5. Submit the Request: Confirm your selection and submit the request to opt-in.

Timeline for Opting In

Taxpayers can opt-in or opt-out of the QRMP scheme for a quarter from the first day of the second month of the preceding quarter to the last day of the first month of the quarter. For instance, to opt-in for the July-September quarter, you can do so from May 1st to July 31st.

Also Read: What Role GST Software Plays For Your Business?

Opting Out of the QRMP Scheme After Deadlines

The QRMP (Quarterly Return Monthly Payment) Scheme is a facilitative measure under the GST framework designed to ease the compliance burden for small taxpayers. However, there may be instances where a taxpayer needs to opt out of the scheme after the deadlines. Here’s what you need to know:

Conditions Under Which a Taxpayer Can Opt-Out

A taxpayer can opt out of the QRMP Scheme if:

  • The aggregate turnover exceeds ₹5 Crore during any quarter of the current financial year.

  • The taxpayer wishes to switch back to the monthly filing for any reason.

Consequences of Not Opting Out Within the Specified Deadlines

Failing to opt out of the QRMP Scheme within the specified deadlines can lead to:

  • Being bound to the quarterly filing and monthly payment schedule for the entire quarter.

  • Potential issues with the GST portal if attempting to file returns or make payments outside of the QRMP Scheme’s structure.

Process for Opting Out After the Deadlines

While the option to opt-out is typically available throughout the year, it is not possible to opt out for the same quarter once the deadline has passed. If a taxpayer misses the deadline, they must wait until the next quarter to opt out. The process is as follows:

  1. Login to the GST Portal: Access the GST portal with your credentials.

  2. Navigate to Services: Go to ‘Services’ > ‘Returns’ > ‘Opt-in for Quarterly Return’.

  3. Choose the Quarter: Select the upcoming quarter for which you want to opt out.

  4. Submit the Request: Confirm your selection and submit the request to opt-out.

It’s important to note that opting out after the deadline will only affect future quarters and not the current quarter for which the deadline has passed.

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