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Understanding the QRMP Scheme under GST: A Simple Guide
Anurag Mittal
Anurag Mittal, CEO and Co-founder of Olao Books, is an expert in business finance and operations, with a focus on transforming accounting and payroll solutions for small and medium-sized businesses. As the Co-founder and former Head of Operations and Business at Vervotech, Anurag played a pivotal role in driving 10x revenue growth and leading the company to a successful acquisition.
The Quarterly Return Filing and Monthly Payment (QRMP) scheme is a practical initiative by the Indian government to make GST compliance easier for small businesses. If your turnover is up to ₹5 crores, this scheme could be a game-changer by reducing the frequency of return filings and easing the tax payment burden. Let’s break down how it works and why it might be a great fit for you!
Why was this introduced?
To strike a balance between reducing the compliance burden for small and medium businesses (SMEs) while ensuring the government still gets regular tax collections.
Key Benefits of the QRMP Scheme
- Less Compliance Hassle: Instead of filing monthly, you only need to file two returns every quarter.
- Better Cash Flow Management: Pay taxes every month but in smaller amounts, reducing the risk of a big tax bill hitting you at the end of the quarter.
- Simpler Return Process: Quarterly filings mean less paperwork and time spent on GST compliance.
- Flexibility: You can choose to opt in or out of the scheme each quarter, depending on your business needs.
Who Can Opt for the QRMP Scheme?
To be eligible for the QRMP scheme, you need to:
- Have an aggregate annual turnover of up to ₹5 crores in the previous financial year.
- Opt-in at the Start of Any Quarter: You can opt in for the QRMP scheme at the beginning of any quarter (January, April, July, October).
- GSTIN Requirement: If you have multiple GST numbers (GSTINs) under one PAN, you need to opt for the scheme separately for each GSTIN.
How to Opt for the QRMP Scheme?
Here’s a quick step-by-step guide to getting started with the QRMP scheme:
- Login: Visit the GST portal and log in with your credentials.
- Go to Services: Click on the ‘Services’ tab, then select ‘Returns’ → ‘Opt-in for Quarterly Return.’
- Select the Tax Period: Choose the quarter for which you want to opt in.
- Confirm: Follow the prompts to confirm your selection.
How Does the Filing Work under the QRMP Scheme?
Under the QRMP scheme, filing your returns is a bit simpler:
- GSTR-1 (Sales Details): File quarterly by the 13th of the month following the quarter. For detailed steps, refer to our GSTR-1 filing guide. For example, for April-June, file by July 13th.
- GSTR-3B (Summary Return): File quarterly, but the deadline can differ by state—either the 22nd or 24th of the month following the quarter.
Monthly Tax Payment: What You Need to Know
Even though you file returns quarterly, you still need to pay your taxes monthly using Form PMT-06 by the 25th of the following month. For a comprehensive understanding, check out our article on GST return filing and types of GST returns.“You have two options for this:
- Fixed Sum Method (35% Challan Method): Pay 35% of the tax paid in cash for the last quarter (if you filed quarterly) or 100% of the tax paid in the last month (if you filed monthly).
- Self-Assessment Method: Calculate your actual tax liability for the month based on sales and purchases and pay that amount. This method gives you more control but requires you to keep accurate records.
Key Considerations for Monthly Payment Options
- Fixed Sum Method: Best for those who want simplicity and predictability. It’s a safe option if your sales are relatively stable.
- Self-Assessment Method: Ideal for businesses that fluctuate monthly. It requires you to be vigilant about your books but can potentially save you money.
Watch Out for Interest and Late Fees!
Make sure to pay on time to avoid:
- Interest: Charged if you delay or underpay your taxes under the self-assessment method.
- Late Fees: Applicable if you file GSTR-1 or GSTR-3B late, as per existing GST rules.
QRMP Scheme vs. Regular Filing: A Quick Comparison
Challenges in QRMP and How to Tackle Them
- Misunderstanding Eligibility: Double-check your turnover to ensure it’s within the ₹5 crores limit.Adopting proper GST accounting practices can help prevent such issues.
- Cash Flow Management: Keep a close eye on your funds to ensure you can meet monthly payments without stress.
- System Adaptability: Update your accounting systems to align with the new scheme requirements.
Wrapping Up: Why QRMP Could Be Right for You
The QRMP scheme is a smart choice for small taxpayers looking to simplify their GST compliance. By opting in, you reduce your filing workload, improve cash flow management, and enjoy more flexibility. Stay proactive, keep good records, and optimize your tax strategy under GST, and this scheme can make your GST journey a lot smoother..
Stay on top of your game, and you’ll find the QRMP scheme can help you focus more on running your business and less on dealing with taxes!
Table of Contents
- What is the QRMP Scheme?
- Key Benefits of the QRMP Scheme
- Who Can Opt for the QRMP Scheme?
- How to Opt for the QRMP Scheme?
- Monthly Tax Payment: What You Need to Know
- Key Considerations for Monthly Payment Options
- Watch Out for Interest and Late Fees!
- QRMP Scheme vs. Regular Filing: A Quick Comparison
- Challenges in QRMP and How to Tackle Them
- Wrapping Up: Why QRMP Could Be Right for You
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Frequently Asked Questions
The QRMP scheme allows businesses with a turnover of up to ₹5 crores to file GST returns quarterly while paying taxes monthly.
Businesses with an aggregate annual turnover of up to ₹5 crores in the previous financial year are eligible for the QRMP scheme.
To opt for the QRMP scheme, log in to the GST portal, go to 'Services,' select 'Returns,' and then 'Opt-in for Quarterly Return' for the desired quarter.
Missing deadlines can result in interest charges for delayed payments and late fees for late filing of returns under the QRMP scheme.