Surfing through GST compliance waves can be a big challenge for small businesses, but the Quarterly Return Monthly Payment (QRMP) Scheme is here to make it easier.
Introduced by the Government of India, this scheme is tailored to reduce the compliance burden on small taxpayers by allowing them to file GST returns quarterly while making tax payments monthly.
If you’re a small business owner looking for a simpler way to manage your GST filings, this guide will walk you through everything you need to know about the QRMP Scheme.
What is the QRMP Scheme?
The QRMP Scheme is a thoughtful initiative designed to benefit small taxpayers. Reducing the frequency of return filing saves time, lowers compliance costs, and offers greater flexibility.
For small businesses, this scheme simplifies tax payments, helping them focus more on their core operations rather than getting bogged down by complex compliance processes.
Key Benefits of the QRMP Scheme:
- Reduces the number of GST returns filed annually.
- Lowers compliance costs for small businesses.
- Provides flexibility in managing monthly tax payments.
How Monthly Tax Payments Work in the QRMP Scheme
Under the QRMP Scheme, taxpayers have two options to pay taxes during the first two months of a quarter:
1. Fixed Sum Method (FSM)
Also known as the 35% Challan Method, the FSM simplifies tax payments by allowing taxpayers to pay a predetermined amount:
- Quarterly Filers: Pay 35% of the tax paid in the last quarter.
- Monthly Filers: Pay an equal split of the tax paid in the last month of the previous quarter.
2. Self-Assessment Method (SAM)
The SAM gives taxpayers more control by letting them calculate their actual tax liability based on:
- Outward supplies.
- Input tax credit (ITC) available.
This method is ideal for those who prefer precision in their monthly tax calculations.
Steps to Pay Taxes Using Form GST PMT-06
- Log in to the GST Portal: Access the portal and go to the ‘Services’ tab.
- Select Payment: Navigate to ‘Payments’ > ‘Create Challan’.
- Choose the Tax Period: Specify the relevant month.
- Select Payment Method: Opt for FSM or SAM.
- Enter Details: Fill in the tax amounts under CGST, SGST, IGST, and Cess.
- Generate Challan: Click ‘Generate Challan’ after entering the details.
- Make Payment: Complete the payment through your preferred mode (Net Banking, OTC, NEFT/RTGS).
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. Simply, 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.
Steps to Use the IFF
- Log in to the GST Portal: Use your credentials to access the portal.
- Navigate to IFF Section: Go to ‘Returns Dashboard’ > ‘Invoice Furnishing Facility’.
- Upload Invoices: Manually enter invoice details or use the offline tool.
- Verify and Submit: Check for accuracy and submit the details.
- Deadlines: Upload invoices between the 1st and 13th of the following month. For example, for January’s invoices, the IFF can be used from February 1st to 13th.
How to Opt for the QRMP Scheme
Eligible taxpayers can easily opt for the QRMP Scheme through the GST portal.
Eligibility Criteria
- Must be a regular taxpayer (not in the composition scheme).
- Annual Aggregate Turnover (AATO) should not exceed ₹5 crore.
- Certain taxpayers, like non-resident taxable persons, are ineligible.
Step-by-Step Guide
- Login to GST Portal: Use your credentials.
- Navigate to Services: Go to ‘Services’ > ‘Returns’ > ‘Opt-in for Quarterly Return’.
- Select Financial Year and Quarter: Choose the relevant period.
- Submit the Request: Confirm and submit your opt-in selection.
Timeline
You can opt into the scheme for a quarter from the 1st day of the second month of the previous quarter to the last day of the first month of the current quarter. For example, to opt-in for the July-September quarter, you can do so from May 1st to July 31st.
Opting Out of the QRMP Scheme
If your business needs to change, you can opt out of the QRMP Scheme. However, this must be done within specified deadlines.
Reasons to Opt Out
- Annual turnover exceeds ₹5 crore.
- Preference for monthly filing.
Consequences of Missing Deadlines
Failing to opt-out within the deadlines means:
- Remaining bound to the quarterly filing schedule for the entire quarter.
- Facing restrictions on filing outside the scheme’s structure.
How to Opt-Out
- Login to the GST Portal: Use your credentials.
- Navigate to Services: Go to ‘Returns’ > ‘Opt-in for Quarterly Return’.
- Select the Quarter: Choose the upcoming quarter.
- Submit the Request: Confirm and submit.
So, Are You Going to Opt-In Or Opt-Out?
The QRMP Scheme is a well-thought-out initiative to ease GST compliance for small businesses. By simplifying return filing and offering flexible payment options, it aligns with the dynamic needs of small enterprises.
Features like the IFF further enhance the scheme’s utility by ensuring a steady flow of ITC, benefiting both taxpayers and their buyers.
Whether you’re a seasoned business owner or just starting, the QRMP Scheme offers a streamlined approach to managing GST. By leveraging its benefits, you can focus on growing your business while staying compliant.
