Master the QRMP Scheme: The Ultimate Guide to Quarterly Returns & Monthly Payments Under GST
For small and medium-sized enterprises (SMEs) and growing businesses across India, managing tax compliance has historically meant a relentless cycle of paperwork. Under the standard Goods and Services Tax (GST) framework, businesses were required to file an exhaustive 24 returns annually—comprising 12 GSTR-1 returns for outward supplies and 12 GSTR-3B summaries for tax payments. For lean teams, tracking monthly deadlines often distracted from core business growth.
To alleviate this compliance burden, the GST Council introduced the QRMP Scheme (Quarterly Return Monthly Payment). This mechanism allows eligible taxpayers to switch to a quarterly return filing schedule while keeping government cash flows steady through simplified monthly tax payments.
This comprehensive guide explores the mechanics, eligibility parameters, calculation methods, operational nuances, and strategic benefits of the QRMP scheme to help your business streamline tax operations.
1. What is the QRMP Scheme?
The QRMP Scheme is an optional compliance path designed under the GST framework to simplify tax filing for small taxpayers. Under this scheme:
Returns are filed quarterly: Instead of filing GSTR-1 and GSTR-3B every month, businesses file them once every three months.
Taxes are paid monthly: To ensure the government maintains a continuous revenue stream, taxpayers must deposit their tax liabilities for the first two months of the quarter via a simple challan, settling the final balance during the quarterly GSTR-3B filing.
By adopting this structure, the total number of primary returns drops dramatically from 24 down to just 8 per year (4 quarters of GSTR-1 and 4 quarters of GSTR-3B).
2. Who is Eligible for the QRMP Scheme?
Not every registered taxpayer can enroll in the QRMP scheme. Eligibility is strictly regulated based on turnover and registration type:
Aggregate Annual Turnover (AATO): The taxpayer’s aggregate annual turnover across all GSTINs under a single PAN must not exceed ₹5 crore in the preceding financial year.
New Registrants: If a business registers mid-year or is newly established with no prior financial year data, its projected turnover at the time of registration must be below ₹5 crore.
Active Status: The taxpayer must have already filed their pending/due GSTR-3B and GSTR-1 returns up to the month/quarter preceding the opt-in period.
Who is Excluded?
The QRMP scheme is not available for:
Composition scheme taxpayers (who follow separate quarterly rules like CMP-08).
Non-resident taxable persons.
Input Service Distributors (ISDs).
Taxpayers required to deduct Tax Deducted at Source (TDS) under Section 51.
E-commerce operators liable to collect Tax Collected at Source (TCS) under Section 52.
Persons supplying online information and database access or retrieval (OIDAR) services from outside India to non-taxable online recipients.
3. How the QRMP Scheme Works: Month-by-Month Breakdown
To master the QRMP workflow, you must look at how each quarter is structured. Let us break down a standard quarter (for example, October to December):
4. Monthly Tax Payment Mechanics: The Two Methods
Even though you file returns quarterly, tax must be discharged for the first two months of each quarter. Taxpayers can choose between two primary methods to compute this monthly payment:
Method 1: The Fixed Sum Method (The 35% Rule)
The GST portal auto-calculates a challan based on your past payment track record.
If you filed quarterly in the previous cycle, you pay 35% of the net cash tax liability paid in the preceding quarter.
If you were filing monthly in the preceding quarter, you pay an amount equal to 100% of the cash tax liability paid in the last month of that quarter.
Advantage: Zero calculation hassle; quick and automatic.
Method 2: The Self-Assessment Method (Actual Liability)
Taxpayers calculate their actual tax liability for the month by reviewing outward supplies, inward supplies subject to Reverse Charge Mechanism (RCM), and available Input Tax Credit (ITC).
Tax is paid using Form GST PMT-06.
Advantage: Ideal for businesses experiencing fluctuating revenues, preventing overpayment or unnecessary cash blockages.
Note on Interest: If you opt for the Fixed Sum Method but underpay or face cash discrepancies, as long as you deposit the mandated 35% by the 25th, no interest is levied. However, under the Self-Assessment Method, any shortfall in actual liability payment attracts an 18% per annum interest charge from the 26th of the month.
5. The Role of the Invoice Furnishing Facility (IFF)
Under normal circumstances, buyers claim Input Tax Credit (ITC) based on data auto-populated in their GSTR-2B statement. Because QRMP users file GSTR-1 quarterly, their buyers would normally have to wait three months to see their credit reflections—a major bottleneck for B2B supply chains.
To solve this, the government introduced the Invoice Furnishing Facility (IFF):
What it is: An optional facility allowing QRMP taxpayers to upload their B2B outward invoices for the first and second months of a quarter.
Limit: You can upload invoices up to a cumulative value of ₹50 lakh per month in the IFF.
Benefit: Your B2B clients can view and claim their ITC immediately in their GSTR-2B, preserving healthy vendor-client business relationships.
6. How to Opt In or Opt Out of the QRMP Scheme on the GST Portal
Transitioning into or out of the scheme is entirely digital and managed directly through the official GST portal:
Log in to the GST Portal using valid credentials.
Navigate to Services > Returns > Opt-in for Quarterly Return.
Select the relevant Financial Year and Quarter.
Save and submit your preference using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
Window Constraint: The option to switch can generally be exercised from the 1st day of the second month of the preceding quarter up to the last day of the first month of the current quarter. Once selected, the scheme rolls forward automatically until you cross the ₹5 crore threshold or actively choose to opt out.
7. Pros and Cons of the QRMP Scheme
Before migrating your accounting workflows, weigh the distinct operational advantages against potential challenges:
Advantages:
Reduced Compliance Friction: Slashes filings from 24 down to 8 per year, saving administrative time and professional filing costs.
Better Working Capital Management: Using the Fixed Sum method or paying via monthly challans prevents sudden massive cash outflows at quarter-end.
Flexibility: Options to shift between self-assessment and fixed-sum payment models provide strategic financial cushioning.
Disadvantages / Considerations:
ITC Delay Risks: If you choose not to use the IFF facility during months 1 and 2, your B2B buyers face delayed ITC matching, which may invite friction in commercial negotiations.
Interest Penalties on Shortfall: Miscalculations under the self-assessment method trigger standard statutory interest rates (18% p.a.).
8. Conclusion
The QRMP Scheme represents a progressive step toward frictionless tax compliance for India’s small business ecosystem. By lowering filing frequencies while protecting government revenue collection via monthly remittances, it strikes a pragmatic balance between regulatory oversight and business freedom.
Evaluate your yearly turnover projections, consult your internal accounting team or tax consultant, review your B2B client dependencies, and leverage the GST portal windows to determine if transitioning to the QRMP scheme can optimize your enterprise operations today.
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