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What is the QRMP scheme?

Published in GST Compliance 4 mins read

The QRMP (Quarterly Return, Monthly Payment of Taxes) scheme is an initiative designed to simplify tax compliance for small taxpayers under the Goods and Services Tax (GST) regime.

Understanding the QRMP Scheme

The Quarterly Return, Monthly Payment (QRMP) Scheme is a significant measure introduced to ease the burden of GST compliance, particularly for smaller businesses in India. It allows eligible taxpayers to furnish their GSTR-1 (Statement of Outward Supplies) and GSTR-3B (Summary Return) on a quarterly basis, while ensuring that their tax payments continue to be made monthly.

Core Objective

The primary objective of the QRMP scheme is to simplify compliance for a vast segment of taxpayers. By enabling less frequent return filing (from monthly to quarterly), it aims to:

  • Lessen the administrative burden and effort required for GST compliance.
  • Improve the overall ease of doing business for small enterprises.
  • Enhance convenience for taxpayers by streamlining filing processes.

Eligibility for the QRMP Scheme

The scheme is specifically tailored for a particular group of taxpayers, ensuring its benefits reach those who need them most.

Eligibility Criteria:

  • Aggregate Turnover: Taxpayers whose aggregate turnover at the PAN (Permanent Account Number) level is up to Rs. 5 crore in the preceding financial year are eligible to opt for this scheme.

The table below summarizes the key features of the QRMP scheme:

Criterion Detail
Scheme Name Quarterly Return, Monthly Payment (QRMP) Scheme
Primary Purpose Simplify tax compliance for small taxpayers
Eligibility Aggregate turnover (PAN-level) up to Rs. 5 crore
Return Filing GSTR-1 and GSTR-3B filed quarterly
Payment Frequency Taxes paid monthly

How the QRMP Scheme Works

Once a taxpayer opts for the QRMP scheme, their return filing frequency is reduced, but their tax payment obligations remain monthly to ensure a consistent flow of revenue to the government.

Key operational aspects of the scheme include:

  • Quarterly Return Filing: Eligible taxpayers are required to file their GSTR-1 and GSTR-3B returns only once every quarter. This significantly reduces the number of returns from twelve to four in a financial year.
    • GSTR-1: Details of outward supplies (sales) are furnished quarterly.
    • GSTR-3B: A consolidated summary return covering outward supplies, inward supplies, input tax credit availed, and tax payable is also filed quarterly.
  • Monthly Tax Payment: Despite quarterly return filing, taxes must still be paid on a monthly basis by the 25th of the following month. This can be done through two convenient methods:
    • Fixed Sum Method: A pre-filled challan is generated based on a percentage of previous tax liability (35% of previous quarter's cash liability for the first two months, or 100% of previous month's liability for monthly filers).
    • Self-Assessment Method: Taxpayers can pay the actual tax liability after considering their input tax credit for the month.
  • Invoice Furnishing Facility (IFF): To ensure that recipients of supplies from QRMP taxpayers can claim Input Tax Credit (ITC) promptly, the scheme provides an optional Invoice Furnishing Facility (IFF). This allows QRMP taxpayers to upload business-to-business (B2B) invoices on a monthly basis (up to Rs. 50 lakhs per month), ensuring their buyers can view and claim ITC without waiting for the quarterly GSTR-1 filing.

Benefits for Small Taxpayers

The QRMP scheme offers several practical advantages for small businesses:

  • Reduced Compliance Burden: Less frequent filing means less time and effort spent on tax procedures, allowing businesses to focus more on their core operations.
  • Improved Cash Flow Management: While tax payments are monthly, the detailed return preparation is quarterly, offering better planning and reconciliation opportunities.
  • Enhanced Ease of Doing Business: It simplifies the overall GST compliance landscape, contributing to a more favorable business environment for small and medium-sized enterprises.

In essence, the QRMP scheme strikes a crucial balance, offering significant compliance ease through quarterly returns while maintaining a consistent flow of tax revenue through monthly payments, thereby benefiting both taxpayers and the tax administration.