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GST Quarterly Return Filing Option for Small Businessman

The CBIC (Central Board of Indirect Taxes and Customs) introduced the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme under GST to assist small taxpayers with a turnover of less than Rs. 5 crores. This scheme provides the valuable benefit of filing GST returns every quarter, reducing the expenses and administrative burden typically associated with monthly return filing. This article will explore the GST Quarterly Return Filing Option for Small Businessmen. BK & Co Auditors Salem streamlines the GST return filing process for you.

GST Return

GST returns are documents that businesses registered under India's Goods and Services Tax (GST) system must file with the tax authorities. It contains details of the business's financial transactions, including sales, purchases, tax collected, and tax paid. Filing GST returns aims to report the GST liability and claim the input tax credit. GST returns are filed periodically, either on a monthly or quarterly basis, depending on the size and type of business.

Who are Small taxpayers?

Small taxpayers are individuals or businesses with an annual turnover of up to Rs. 5 crores in the previous financial year. These small taxpayers are provided with the flexibility to choose between filing their main GST returns quarterly or monthly. If they opt for quarterly filing, they can choose from three different options:

  • GSTR-Quarterly: This option allows small taxpayers to file their main GST returns every quarter.
  • GSTR-Sahaj: GSTR-Sahaj is another quarterly filing option designed for businesses with simpler tax requirements.
  • GSTR-Sugam: GSTR-Sugam is a quarterly filing option suitable for taxpayers with relatively straightforward tax affairs.

Introduction to the Quarterly Return Filing Scheme

The Quarterly Return Filing Scheme, known as the Quarterly Returns Monthly Payment (QRMP) scheme, offers eligible taxpayers the convenience of filing GSTR-1 and GSTR-3B returns every quarter instead of monthly. This scheme is designed for registered taxpayers with a turnover of up to INR five crores in the previous financial year. In the past, taxpayers were obligated to file GSTR-1 and GSTR-3B monthly. However, with the QRMP scheme, they now have the flexibility to file returns once every quarter. For example, during April-June, returns can be filed once, and taxes for April can be paid by the due date in May.

  • Under the QRMP scheme, taxpayers must make monthly tax payments using either the fixed sum method (via a pre-filled challan) or the self-assessment method (calculating the tax amount after adjusting the Input Tax Credit).
  • Once opted for, taxpayers remain in this scheme until they exceed the turnover threshold or choose to opt-out.

Eligible Persons for the QRMP Scheme

The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme is available for the following registered persons: Registered Person with Aggregate Annual Turnover (AATO) up to Rs. 5 Crore in the previous fiscal year. If AATO exceeds Rs. 5 Crore during a quarter, the person will become ineligible for the scheme from the next quarter.

  • Anyone obtaining new GST registration or opting out of the GST Composition Scheme can also choose the QRMP Scheme.
  • The QRMP Scheme option can be exercised GSTIN (Goods and Services Tax Identification Number). This means that some GSTINs associated with the same PAN can opt for the scheme, while others may remain outside.

GST Quarterly Return Filing Option: Overview

The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme offer eligible taxpayers the convenience of reporting their GSTR-1 and GSTR-3B returns quarterly instead of monthly. However, tax payments must still be made every month using a challan.

Opting In and Opting Out

To enroll in the QRMP scheme, taxpayers should log in to the GST portal and follow the path: Services > Returns > Opt-in for Quarterly Return. This choice must be made between the 1st of the second month of the preceding quarter and the last day of the first month of the quarter for which the option is being exercised. Similarly, to exit the QRMP scheme, the same process is followed.

QRMP Scheme Benefits for Small Business Owners

Reduced Compliance Burden: The quarterly return filing option significantly reduces the compliance burden on small businesses, allowing them to allocate resources more efficiently.

  • Financial Planning: Small business owners can plan better with the extended filing period. This enables them to manage their cash flows more effectively and understand their tax obligations better.
  • Time Savings: Small business owners can save valuable time by focusing on their core business operations rather than dedicating excessive time and effort to tax compliance activities.
  • Ease of Implementation: The simplified documentation and reduced filing frequency make it easier for small businesses to adopt the quarterly return filing option without requiring extensive financial expertise.

Methods of Making Payment

Fixed Sum Method (FSM):

  • If your last GSTR-3B was filed quarterly, you may receive a pre-filled challan for an amount equal to 35% of the tax amount paid in cash during the previous quarter.
  • New taxpayers, those who haven't filed their final GSTR-3B, or those who have opted out of the Composition scheme are not eligible for the 35% challan.
  • If your last GSTR-3B was filed monthly, you will receive a pre-filled challan for an amount equal to the total tax amount paid in cash during the last month of the previous quarter.

Self-Assessment Method (SAM):

Taxpayers must pay the tax due through a challan in Form GST PMT-06.

  • This involves calculating the tax liability on inward and outward supplies and considering the input tax credit available for the period following the law.
  • The taxpayer must deposit tax using form GST PMT-06 by the 25th of the following month for the first and second months of the quarter.

Late fees for the delay in furnishing returns are applicable as follows: For Other than NIL Tax Liability:

  • Under CGST Act: Rs. 25
  • Under SGST Act: Rs. 25

For NIL Tax Liability:

  • Under CGST Act: Rs. 10
  • Under SGST Act: Rs. 10

Please note that these late fees are subject to a maximum penalty of Rs. 5,000.

Conclusion

The QRMP scheme offers the significant advantage of Quarterly Gst Return filing, effectively reducing the cost and burden of monthly returns. This feature makes the scheme particularly beneficial and well-suited for small businesses. Monthly return filing requires taxpayers to calculate and prepare returns every month, increasing the likelihood of tax calculation and documentation errors. Therefore, the QRMP scheme is especially beneficial for businesses with simpler and fewer transactions, as it provides a straightforward method for calculating tax liabilities. Additionally, it contributes to reducing disputes between suppliers and buyers, as issues can be addressed over a three-month period. The QRMP scheme is a valuable option for small businesses, streamlining the GST compliance process and minimizing potential errors and disputes.

Simplify Your GST Compliance with BK & Co Auditors Salem

BK & Co Auditors Salem offers expert assistance in filing GST returns under the QRMP (Quarterly Return Filing and Monthly Payment of Taxes) scheme. We understand the unique needs of small taxpayers and provide comprehensive support to streamline the GST return filing process. For a detailed guide, check out our article on Quarterly Gst Returns for small businesses. Additionally, stay informed about Quarterly GST Payment Schemes to enhance your understanding and compliance even further.

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Frequently asked questions

Common questions about GST Quarterly Return filing Option for Small Businessman.

The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme allows eligible taxpayers with an annual turnover of up to Rs. 5 crores to file their GSTR-1 and GSTR-3B returns quarterly instead of monthly. This scheme is designed to reduce the compliance burden on small businesses while still requiring monthly tax payments.
To opt-in or opt-out of the QRMP scheme, you need to log in to the GST portal and navigate to the "Services > Returns > Opt-in for Quarterly Return" section. The option to opt-in or opt-out must be exercised within the prescribed time frame, which is between the 1st of the second month of the preceding quarter and the last day of the first month of the quarter for which the option is being exercised.
The QRMP scheme offers several benefits for small businesses, including reduced compliance burden, better financial planning, time savings, and ease of implementation. By filing returns quarterly instead of monthly, small business owners can allocate resources more efficiently, manage cash flows better, and focus on their core operations.
Under the QRMP scheme, you can make tax payments using either the Fixed Sum Method (FSM) or the Self-Assessment Method (SAM). The FSM involves paying a pre-filled challan amount based on your previous quarter's tax payment, while the SAM requires calculating and paying the actual tax liability for the current period.
Yes, late fees are applicable for delays in furnishing returns under the QRMP scheme. For returns with non-nil tax liability, a late fee of Rs. 25 per Act (CGST and SGST) is charged. For returns with nil tax liability, the late fee is Rs. 10 per Act, subject to a maximum penalty of Rs. 5,000.
Yes, the QRMP scheme option can be exercised at the GSTIN (Goods and Services Tax Identification Number) level. This means that some GSTINs associated with the same PAN can opt for the scheme, while others may remain outside the scheme.
If your aggregate annual turnover exceeds Rs. 5 crores during a quarter, you will become ineligible for the QRMP scheme from the next quarter. You will then be required to file GSTR-1 and GSTR-3B returns on a monthly basis.
Yes, anyone obtaining a new GST registration or opting out of the GST Composition Scheme can choose to enroll in the QRMP scheme, provided their aggregate annual turnover does not exceed Rs. 5 crores.
The extended filing period under the QRMP scheme allows small business owners to better plan their finances and understand their tax obligations more accurately. This enables them to manage their cash flows more effectively and allocate resources accordingly.
Yes, you can seek assistance from professional service providers like BK & Co Auditors Salem for filing GST returns under the QRMP scheme. They offer expert guidance and support to streamline the GST return filing process for small taxpayers, ensuring compliance and minimizing potential errors or disputes.