The Goods and Services Tax (GST) is an all-encompassing indirect tax imposed on the provision of goods and services within India. Mandatory GST registration and filing of GST returns is required for goods suppliers whose aggregate turnover exceeds Rs. 40 lakhs and for service providers with a turnover surpassing Rs. 20 lakhs.  Moreover, those involved in the interstate trade of goods or services are required to acquire GST registration and file the return. The filing of Goods and Services Tax (GST) returns is of paramount importance for businesses. Commencing on January 1, 2021, individuals with an annual turnover exceeding Rs. 5 crore are required to submit returns on a monthly basis. Conversely, those with a turnover of up to Rs. 5 crore in the previous year are eligible to file returns on a quarterly basis.

According to GST regulations, the Quarterly Return Monthly Payment (QRMP) Scheme permits registered individuals (those obligated to submit Form GSTR-1 & GSTR-3B, and with an aggregate turnover of up to Rs. 5 crores) to submit their returns on a quarterly basis. Taxpayers with a PAN-based aggregate annual turnover of up to ₹ 5 Crore in both the current financial year and the preceding financial year (if applicable), and who have already submitted their latest overdue Form GSTR-3B return, qualify for participation in the QRMP scheme.

The QRMP scheme is applicable exclusively to taxpayers obligated to submit Form GSTR-1 and Form GSTR-3B returns. It can be opted for by:

• Registered taxpayers (Normal taxpayers, SEZ Developers, SEZ units)
• Taxpayers who have chosen to exit the composition scheme
• Individuals applying for new registration as a Normal taxpayer

If you possess multiple GSTINs, You have the option to choose the QRMP Scheme for specific GSTINs and refrain from participating in the scheme for other GSTINs registered under the same PAN.

A newly registered taxpayer with an Annual Aggregate Turnover (AATO) of up to ₹ 5 Crores can choose the QRMP scheme based on the following conditions:

If the registration is granted on any date during the first month of a quarter, they can opt for the QRMP scheme from the beginning of that quarter. For instance, an individual granted registration up to January 31, 2023, can opt for the QRMP Scheme starting from the quarter Jan-Mar, 2023, by January 31, 2023.

However, if the registration is granted on any date during the latter two months of a quarter, they can only opt for the QRMP scheme from the next quarter onwards. For example, a person granted registration on or after February 1, 2023, can opt for the QRMP Scheme only from the Quarter Apr-June, 2023, onwards. In this case, they must file Form GSTR-1 and Form GSTR-3B returns monthly for the months of February and March, 2023.

Payment is required to be made in Month 1 (M1) and Month 2 (M2) using the FORM PMT-06 challan. This payment can be made either through a self-assessment basis or a fixed amount determined by the average monthly tax liability in the previous quarter (35% of the net cash liability declared and paid in the preceding quarter).  Following Month 3 (M3), the return covering the entire quarter is to be submitted, and the net cash liability, accounting for the amounts paid in M1 and M2, should be settled. In the absence of any payment made in M1 and M2, it will be assumed that there is an adequate balance in either the cash ledger or the credit ledger of the registered person.  Taxpayers participating in this scheme will not be eligible for cash ledger refunds in Month 1 (M1) and Month 2 (M2) of any quarter. An amendment to FORM PMT-06 is underway, incorporating a section that requires specifying the reason for filling the challan, distinguishing whether it pertains to payment in M1 or M2 for a quarterly return filer.

Interest will be applicable for Month 1 (M1) and Month 2 (M2) if the corresponding liabilities are settled in Month 3 (M3) or beyond. However, it’s important to note that this interest will be self-assessed and will not be automatically calculated by the system.  No interest will be incurred if the taxpayer chooses to fulfil their liability by the stipulated due date at a fixed amount (35% of the net cash liability declared and paid in the preceding quarter as per GSTR-3B), as outlined in the rules (for example, in Month 1), even if it is subsequently discovered that the liability for Month 1 was higher. This is contingent on the condition that the taxpayer settles their entire liability in the GSTR-3B for the respective quarter. Interest will be levied if the liability (whether self-assessed or a fixed sum) for each month is settled after the due date. Late fees, however, will only be applicable if the quarterly return is filed beyond the due date.

Thus Filing Quarterly Return Monthly Payment (QRMP) under the Goods and Services Tax (GST) system can involve several complexities. Ensuring accurate eligibility assessment is crucial to avoid compliance issues. Calculating the correct tax liability for each month, especially when opting for a fixed sum method, can be challenging. Errors in calculation may lead to incorrect payments and potential interest charges. Businesses with multiple GST Identification Numbers (GSTINs) under a common PAN may find it challenging to coordinate and manage the filing requirements for each GSTIN separately. To address these complexities, businesses often can seek the assistance of tax professionals or consultants with expertise in GST compliance to ensure accurate filing and adherence to regulatory requirements. BCL India consists of a team of tax professionals who can provide valuable guidance and assistance to businesses navigating this taxation framework. We can help businesses navigate the complexities of the QRMP scheme, ensuring compliance, optimising tax outcomes, and mitigating risks associated with taxation.

 In short, the benefits of the schemes are:

• The Quarterly GST filing offers the advantage of streamlining compliance for small taxpayers.  The compliance burden is reduced considerably.
• Upon selecting this scheme, taxpayers will be required to submit only four returns, a notable reduction from the previous requirement of filing 12 GSTR-3B returns throughout the year.
• It also minimises your expenses related to assessing tax liability by transitioning from monthly to quarterly compliance requirements.

• This scheme allows taxpayers to conveniently meet their monthly tax obligations through the self-assessment method, utilising a pre-filled challan in the first two months of each quarter.

• You can take advantage of a flexible invoicing facility, allowing you to submit 4 GSTR-1 filings annually. In the initial 2 months of each quarter, you have the option to upload your invoices and promptly claim input tax credits.

• Taxpayers also have the flexibility to join or exit the scheme at any point during the year without encountering any restrictions.