GST returns filing through QRMP or Quarterly returns monthly payment was introduced in July 2019, with the purpose of reducing the cost of return compliances of businesses from monthly to quarterly filing. The system was executed a year after its introduction in October 2020. The new system has certain features which completely overcomes the flaws of the monthly filing system. These include less turnover requirement for enrollment into the system, less frequency and reduced cost of return filing, self-assessment method of calculation and payment of taxes, Invoice Furnishing Facility, and later due dates of filing Returns.
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The new scheme is suitable for small businesses involved in B2C transactions, and having a similar and regular pattern of sales, as opposed to the monthly return filing system which is more suitable for larger businesses involved in B2B transactions, and having a dissimilar and highly unpredictable pattern of sales.
Types of GST Returns
GST returns can be filed using two methods, one involving the monthly filing of returns and the monthly payment of taxes, while the other involving the quarterly filing of returns and the monthly payment of taxes. While the former is mandatorily required to be opted by businesses having an aggregate monthly turnover beyond Rs.5 crores, the latter can be opted by businesses having an aggregate quarterly turnover equal to or less than Rs. 5 lakhs. The table below draws a stark distinction between the two systems of filing returns and payments of the goods and services tax.
| Parameters | Monthly | Quarterly |
|---|---|---|
|
Point of Applicability |
Mandatory if aggregate annual turnover is more than Rs.5 crores |
Can be opted if the aggregate annual turnover is upto Rs. 5 crores |
|
Number of Returns |
12 for 12 months
Forms: GSTR 1 and GSTR 3B |
4 returns for 4 quarters in a year
Forms: GSTR 1 and GSTR 3B |
|
Calculation and payment of taxes |
Every Month |
Payment of taxes every month.
Filing of returns every quarter. |
|
Calculation |
Actual Basis |
Fixed sum
Self-assessment method |
|
Payment |
GSTR 3B |
PMT-06 for the first two months of the quarter. Third month- GSTR 3B |
|
Invoice Furnishing Facility |
Not Required as returns for inward and outward supplies are filed each month |
Can be availed |
|
Due Dates |
GSTR 1- 11th day of the following month
GSTR 3B- 20th day of the following month |
GSTR 1- 13th day of the following month after the end of the quarter.
GSTR 3B- 22nd or 24th (according to the state) day of the following month after the end of the quarter IFF- 13th day of the following month for the first two months of the quarter (GSTR 3B will be used in the third month) PMT 06- 25th day of the following month for first two months of the quarter (GSTR 3B will be used in the third month) |
|
Suitability |
B2B transactions Dissimilar pattern of sales Highly unpredictable turnover |
B2C transactions Similar pattern of sales Limited transactions |
GST Monthly Returns
Filing GST monthly returns is a mandatory compliance for all kinds of businesses with an annual turnover greater than Rs.5 crores in the previous financial year. Such businesses need to file their GST returns once every month or 12 times in a financial year, to the concerned tax authorities in forms GSTR 1 and GSTR 3B. GSTR1 is the form in which the taxpayer files the necessary details that are required to calculate the net amount of tax payable.
These include the aggregate turnover, outward and inward supplies supported by invoices, revised invoices, debit notes, credit notes, and delivery challans. You can only file the monthly returns after the GST identification number has been allotted to you. GSTR 3B is the form which contains the actual details of the tax payable to the government. These include the details of taxable inward and outward supplies for inter-state, intra-state, and export-related business activities. The amount claimed for ITC and the details related to the actual payment of taxes including the payments of TDS, tax cess, interest, and late fee, if any.
The due dates for filing GSTR 1 and GSTR 3B are the 11th day and the 20th day of the following months. The late fee on GSTR 1 and GSTR 3B has been rationalized by the government in the year 2021 to the following amounts:
| CGST per day of delay | SGST per day of delay | IGST per day of delay | TOTAL per day of delay | |
|---|---|---|---|---|
|
Intra-state supplies |
Rs.25 |
Rs.25 |
- |
Rs.50 |
|
Inter-state supplies |
- |
- |
Rs.50 |
Rs.50 |
|
Nil Filing |
Rs.10 |
Rs.10 |
- |
Rs.20 |
The government has capped the late fee at the maximum values as mentioned in the table below.
| Criteria of filing the monthly returns | Maximum Late Fee |
|---|---|
|
Nil. returns in GSTR 1 and GSTR 3B |
Rs.500 |
|
Annual Turnover in the previous financial year is upto Rs.1.5 crores |
Rs.2,000 |
|
Annual Turnover in the previous financial year is between Rs. 1.5 crores to Rs. 5 crores |
Rs.5,000 |
|
Annual Turnover in the previous financial year is beyond Rs. 5 crores |
Rs.10,000 |
GST Quarterly Returns
The quarterly returns monthly payment scheme or QRMP scheme can be opted by businesses whose annual turnovers in the previous financial years is less than or equal to Rs.5 crores. Such businesses ought to be small and the scheme rightly reduces their cost of filing GST returns. Businesses which have opted for the QRMP scheme must file GST returns four times a financial year or one in each quarter of a year. Such returns shall be filed in GSTR 1 and GSTR 3B forms on a quarterly basis, while the payment of taxes shall be made on a monthly basis of every quarter, using form PMT-06 for the first two months and GSTR-3B for the last month of each quarter.
Additionally, businesses can also avail the Invoice Furnishing Facility or IFF under the scheme. Businesses can use IFF to upload invoices and claim the Input Tax Credit in the first two months of the quarter itself, instead of having to wait for the quarter to end in order to avail the ITC.
Additionally, businesses can also avail the Invoice Furnishing Facility or IFF under the scheme. Businesses can use IFF to upload invoices and claim the Input Tax Credit in the first two months of the quarter itself, instead of having to wait for the quarter to end in order to avail the ITC.
The due dates for filing returns under the QRMP scheme in forms GSTR 1, GSTR 3B, and PMT-06 are 13th day, 22nd or 24th day, and 25th day of the month immediately following the end of the quarter in concern. The late fee for filing GSTR 1 and GSTR 3B is same as that of the monthly returns, while there is no late fee prescribed for the delayed filing of PMT-06 and the delayed payment of taxes in the first two months of the quarter.
Conclusion
The most prominent benefit of the QRMP scheme is the option of quarterly filing of GST returns, thereby reducing the cost and burden of filing returns. This makes the scheme extremely beneficial and absolutely suitable for small businesses. However, drafting returns under the QRMP scheme might become hectic as the sales, purchase, input, and output taxes of three months will have to be calculated at the same time. A monthly return filing compels the taxpayer to calculate and draft his returns every month, thereby reducing the chances of mistakes in the calculation and documentation of the returns. Therefore, the QRMP system is ideal for businesses that have lesser and simpler transactions, and a straightforward method of calculation of the tax payable. Moreover, it is better that the disputes between the supplier and buyer, spites accumulated in three months. The choice of availing either of the two methods depends on their thorough analysis regarding their suitability for different businesses.
