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Quarterly Return Filing and Monthly Payment of Taxes Scheme under GST

If you are a small taxpayer and your business has a turnover that’s lower than Rs. 5 Crores, the Central Board of Indirect Taxes and Customs (CBIC) has introduced a new scheme under the Goods and Services Tax (GST) regime that may be beneficial to you. Accordingly, the CBIC has introduced the Quarterly Return Filing and Monthly Payment or QRMP scheme under GST that lets small taxpayers file GST returns on a quarterly basis and make tax payments every month. The scheme is an optional one, and any taxpayer may decide whether to opt-in or out.

 

What Does the QRMP Scheme Under GST Entail?

Thanks to this scheme, small businesspersons would need to file only eight returns, ie, four GSTR1 and four GSTR 3B each in a year as against the 16 returns that would need to be filed until the scheme was brought in, as of January 2021.

The QRMP scheme under GST is aimed at simplifying compliance for taxpayers as it helps them shift the GSTR-3B returns filing from the monthly GST return filing to a cycle that’s quarterly. It, therefore, ensures flexibility.

Owing to the new scheme, taxpayers can opt for GST quarterly return, which includes both GSTR-1 and GSTR-3B and upload monthly invoices which will be reflected in the GSTR-2A and GSTR-2B of a customer, on the basis of which the customer can avail of input tax credit in a timely manner.

Types of GST Returns

GSTR-1, GSTR-2A, GSTR - 3B and GSTR - 2B are all different types of returns that a business person would need to file based on the taxpayer type. The taxpayer types could include TDS deductor, e-commerce operator, input service distributor and non-resident taxpayer, among others. The return filing frequency for different GST returns may differ if the taxpayers opt to use the QRMP scheme.

GSTR-1 is either a quarterly or monthly GST return that is filed by taxpayers so as to reveal details of the outward supplies for a month, along with tax liability. GSTR-3B is a monthly summary of returns filed by taxpayers by the 20th of the month after.

Any person who is registered and wishes to file their GSTR-3B quarterly return would need to mention the same on the GST portal starting from the first of month 2 of the earlier quarter till the last day of month 1 of the quarter for which this option is used. As an example, if a taxpayer ‘A’ wants to file quarterly returns for the January to March 2021 quarter, the person would need to opt for quarterly returns filing on the GST portal in the preceding quarter, which is November 1, 2020, to January 31, 2021. After registering for GST and opting for the quarterly filing, the taxpayer would need to provide returns every quarter for all tax timeframes in the future.

 

There are exceptions to the quarterly return filing rule under certain circumstances. These are:

  • If the taxpayer is not eligible, ie, if their turnover exceeds Rs. 5 Crores for the quarter, then, in the next quarter, the person won’t be able to file quarterly returns.

  • If the taxpayer decides to file GSTR-3B monthly GST return, he or she won’t be able to file quarterly returns.

  • If the registered taxpayer has not filed the previous returns which were due as of the date of filing quarterly returns, the person won’t be able to file quarterly returns.

What is the Difference between the Previous GSTR-1 and GSTR-3B System and the QRMP Scheme? 

The earlier system that permitted quarterly GSTR-1 and monthly GSTR-3B meant that tax payments had to be made alongside the filing of GSTR-3B. Small taxpayers in the earlier system would have to pay their taxes on a monthly basis while filing GSTR-3B. The QRMP scheme under GST also offers tax payments on a monthly basis.

The tax payment under the QRMP scheme is required to pay tax for the first two months in a quarter by way of the fixed sum method wherein the GST portal will generate a prefilled challan or the self-assessment method wherein the taxpayer would need to pay the actual tax liability on the actual sales post input tax credit.

If you are a small business owner with a turnover of up to Rs. 5 Crores, you too can opt for the Quarterly Return Filing and Monthly Payment of Taxes Scheme. If you need more information on GST, you can visit Finserv MARKETS. Along with valuable information, Finserv MARKETS, you can avail a variety of products and offers that you can choose from depending on your needs and financial goals.