The Indian government has introduced the QRMP plan to make it easier for small business taxpayers to file taxes.
What is the QRMP scheme?
The Quarterly Reports Monthly Payment (QRMP) program, which is in effect as of January 1, 2021, enables registered taxpayers with combined revenue of up to INR 5 crores in the most recent financial year to file returns every quarter and pay taxes monthly.
Prior to the QRMP scheme, taxpayers had to file GSTR-1 and GSTR-3B every month. Now, they just have to do so once every three months.
For instance, you can now only submit your returns once from April through June, and you can pay your taxes by the May deadline. By this plan, you must pay taxes every month (i.e., the first two months of a quarter) using the fixed sum method (via a pre-filled challan) or the self-assessment method (due tax amount after adjusting ITC).
If you choose this plan, you’ll remain a part of it until you reach the turnover level or decide to leave.
Why is the QRMP scheme important?
- Small business taxpayers need to be aware of this plan since it would reduce the number of returns they must file annually.
- The optional Invoice Furnishing Facility (IFF) is another alternative for qualifying taxpayers under this program.
- Four GSTR-1 returns can be submitted through IFF each year, and you can upload invoices for the first two months of a quarter rather than waiting until the end of the quarter before filing the return.
Criteria for the QRMP scheme
- This program is only available to those who are required to file Form GSTR-1 and Form GSTR-3B returns.
- Your prior fiscal year’s total yearly income must have been up to INR 5 crores or less. If your turnover exceeds this limit, you will no longer be eligible for the program starting next quarter.
- Your last GSTR-3B return that was due should have been submitted.
- You should not have any data saved in Form GSTR-1 in the portal for the time frame you specify for the scheme. You can choose the plan after wiping the Form GSTR-1’s recorded data.
How to avail the QRMP scheme
- Visit the GST portal to opt-in or out of the QRMP scheme.
- Select Login →Services → Returns.
- Next, select the option to opt-in for quarterly returns.
Payment of taxes under the QRMP scheme
You must submit Form PMT-06 and create a payment challan to pay taxes for the first two months of a quarter. Every month’s payment is due by the 25th of the following month.
There are two payment options available:
- Fixed-sum approach
If your most recent GSTR-3B was filed quarterly, you could obtain a pre-filled challan for 35% of the tax amount (paid in cash) from the previous quarter. However, you cannot access the 35% challan if you are a new taxpayer, have not submitted your most recent GSTR-3B, or have chosen to forgo the Composition plan.
If your most recent GSTR-3B was submitted every month, you could obtain a pre-filled challan for the entire tax amount (paid in cash) in the final month of the preceding quarter.
- Self-evaluation technique
It is the current approach where a taxpayer can pay the tax due by considering the tax due on both inbound and outbound supply and the available input tax credit.
The taxpayer must manually calculate their monthly tax obligation and submit form PMT-06 with the payment. For establishing the amount of ITC available for the month, the taxpayer might use form GSTR-2B.
There are also other circumstances where no deposit may be necessary, such as:
- For the first month of the quarter, either the electronic cash/credit ledger balance is sufficient to cover the tax bill for that month, or there is no tax liability.
- For the second month of the quarter, either there is enough money in the computerised cash/credit ledger to cover the total taxes owed for the first and second months, OR there are no taxes owed.
Who is eligible for the GST QRMP scheme?
The following taxpayers are qualified for the QRMP program:
- Every taxpayer's combined revenue in the current and prior fiscal years was up to Rs. 5 crores (based on PAN).
- GSTR-3B must be filed by the deadline.
What is the due date for the QRMP scheme?
For some states, the due date for filing GSTR-3 is the 22nd day of the following month after a quarter, and for some, it is the 24th day of the following month after a quarter.
What are QRMP and IFF?
The Quarterly Returns with Monthly Payment (QRMP) Scheme enables qualifying taxpayers to file Forms GSTR-1 and GSTR-3B every quarter while making monthly challan payments for their tax obligations.
The Invoice Furnishing Facility (IFF) allows quarterly taxpayers enrolled in the QRMP system to submit the details of their outgoing supply in the first two months of the quarter (M1 and M2) and transfer the credit to their intended recipients.