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Udeetta Sarma

December 31, 2024

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Govt. Schemes

Basics of GST

Steps to Make Tax Payment Under the QRMP Scheme

India’s Goods and Services Tax (GST) Council has introduced a special scheme for small taxpayers called the Quarterly Return Monthly Payment (QRMP) Scheme to make filing easier. The provision allows registered businesses to file returns quarterly instead of monthly and continue paying their monthly taxes.

This enables low administration and constant cash flow. You will learn in detail about the QRMP Scheme, its Benefits, who can avail of it, Eligibility, and the Process of making tax payments under this scheme.

What is the QRMP Scheme?

QRMP (Quarterly Returns with Monthly Payment) will also help you file quarterly returns and pay monthly taxes. This is an optional facility available on the GST portal to all taxpayers registered under goods and services tax laws who have reported aggregate turnover of less than ₹5 crore in the preceding financial year. This is a below of the services provided to the eligible taxpayers in the QRMP Scheme as implemented in the year 2021 -

Quarterly GST Returns GSTR-3B in India: This saves the businesses from filing monthly returns and they will be required to file the GSTR-3B return only once.

Tax Liability Payments are Monthly: Returns, are made quarterly but liability payments must be made monthly.

The scheme pays tax regularly thus saving time and money and maintaining regularity in payment of tax.

Key Benefits of the QRMP Scheme

Fewer Compliance:

From 12 to 4 returns would be to file a financial year due to a reduction in the number of returns with the quarterly return.

Cash Flow Management:

Monthly payments reduce the risk of businesses having to pay large amounts in lump sums at once.

Lower Penalty on Underpaid Balances:

Since self-assessment is allowed and monthly payments are possible, the taxpayers will be spared penalties for underpayment resulting from misjudgment of estimated tax liabilities.

Eligibility for the QRMP Scheme

Businesses are eligible if:

They do not earn more than ₹5 crores of turnover per year.
They will be registered as normal taxpayers under GST.
They choose at the beginning of a quarter (January, April, July or October).

So if a business signs up at the beginning of April, they can receive the scheme from April to June, and so forth. Taxpayers may join or leave the scheme every quarter without restriction, based on their evolving financial position.

Steps to Make Tax Payments Under the QRMP Scheme

Here's a step-by-step guide for making tax payments under the QRMP(Quarterly Returns with Monthly Payment) Scheme:

1: Log in to the GST Portal

Go to the GST portal.

2: Navigate to the Payment Section

Click Payments and choose Create Challan.

3: Choose Your Payment Method

Here is how taxpayers under the QRMP Scheme can make payments:

Fixed Sum Method (FSM):

A lump sum amount in this case is pre-filled in the challan which is generated by the GST portal itself based on your last due tax calculation.

So if the taxpayer filed quarterly on the last return cycle, the system will consider 35% of the balances due on the last quarter.

Where the taxpayer was a monthly filer in the previous cycle, the amount will equal 100% of the previous month’s tax liability.

It is convenient as it saves time on calculations for businesses with steady sales and tax liability.

Self-Assessment Method (SAM):

It is a manual process wherein the taxpayer computes the actual sales and then pays tax for the month after using the available input tax credits.

This is a good method for businesses that have an inconsistent monthly turnover or have an irregular cash flow.

It should be noted that the self-assessed amount is only entered in the challan, which means if the difference is more or less of the tax liabilities from month to month, then the payment can always be adjusted or may be made up in the challan.

4: Generate the Challan

Select the payment type, and then either check the populated details (for the Fixed Sum Method) or provide the tax amount (for the Self-Assessment Method).

Click on Generate Challan and you are almost there.

Your challan will display different payment modes — Net Banking, UPI, NEFT/RTGS. Select your preferred payment type.

5: Complete the Payment

Continue to pay as per the guide

Generated after payment, a Payment Reference Number (PRN) slip is proof of payment Keep this reference number for the future in case you need to confirm it in the future, and your records refer to this number.

6: Verify Payment Status

Once payment is made, you can view the status here: Services > Payments > Track Payment Status

This process verifies whether the GST has been correctly applied by monitoring whether payment has occurred properly

You might also be interested in Correction Rectification and Amendment of GST Returns in GSTR 3B and GSTR 1

Advantages and Disadvantages of the QRMP Scheme

Advantages:

Simple filing: Only 4 filings of GSTR-3B in a year.
Monthly payments improve cash management.
Optionality on payment methods match cash flow

Drawbacks:

Increased underpayment penalties for incorrect assessments
This can add complications in reconciling quarterly returns, particularly if you are using Self-Assessment.

GST Payment Due Dates for QRMP Scheme

The last date to make monthly payments under the QRMP Scheme is the 25th of the subsequent month. E.g. the tax payment for April must be paid by 25 May. That consistency assists businesses in budgeting for their payments.

Interest Rates and Fees for Late Payment

If a taxpayer registered under the QRMP Scheme fails to pay the due within said period, he shall be liable to pay interest on the amount of tax due at a rate of 18% per annum. Interest is compounded daily from the due date until the payment is made. Essentially, the key to not incurring interest and penalties is staying current on your monthly payments.

Example Scenario for Tax Payment under QRMP Scheme

Let us take an example of a retailer with a turnover of ₹4.5 crores who is registered under the QRMP Scheme and wants to go with Fixed Sum for the quarter of April — June. Based on the previous quarter's tax liability, the GST portal calculates 35% of the last quarter’s liability as the monthly tax amount. The retailer logs into the GST portal, verifies the pre-filled amount, generates a challan, and completes the payment for April and May. In June, they file the GSTR-3B return and make any adjustments if necessary.

Conclusion

The QRMP Scheme is a great boon to small businesses in that they can make GST compliant without the burden of monthly filings. Taxpayers can more closely match the payments with cash flow to minimize adverse cash flow pressure since taxpayers can select between the Fixed Sum and Self-Assessment Methods. With monthly payments being uniform and fairly easy to comply with together with payments every quarter, the QRMP Scheme is a beneficial option amongst eligible businesses as it offers cash flow flexibility. It is critical to understand how payment works, to keep track of due dates and to leverage available options to facilitate tax payments for a seamless experience.

FAQ

1. Within a quarter can businesses toggle between Fixed Sum and Self-Assessment Methods?

Yes, taxpayers are allowed to change methods quarterly. For example, you might use the Fixed Sum Method this month, but then next month run a Self-Assessment based on how much change you need in your business.

2 . Is there a penalty for choosing the incorrect payment amount under the Fixed Sum Method?

In case of overpayment made by the taxpayer, the excess payment shall be set off against the next quarter's payment. On the other hand, in the case of a tax underpayment, interests shall be charged, except when the taxpayer makes the reconciliation at the correct time.

3.How does a taxpayer know if they qualify for the QRMP(Quarterly Returns with Monthly Payment) Scheme?

The GST portal checks automatically according to the annual turnover. At the beginning of every quarter, the taxpayer can view the QRMP option on the portal if he is eligible.

4.What happens if there is no tax liability in a month?

In the absence of a tax due, the taxpayer can choose not to pay that month. Nevertheless, a nil return for the quarter is still required.

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