To lower the burden of tax compliance on MSME entities, Government has introduced QRMPs with effect from 01 Jan, 2021. QRMP is the new scheme launched by government, many GST registered entities are still have confusion about which scheme to opt in or opt out, as QRMP is optional scheme which can be opted by GST registered entity with Turnover upto INR 5 crores. This article explains comparative analysis of different features of both QRMPs & Monthly Return Filing Scheme as well as differentiate between QRMPs V/S Monthly 3B.
Both the schemes have their own pros and cons that is preferable to you/your client. Since there are broad difference in every business due to different models, availability of funds, payment terms with customers and suppliers, availability of skilled staff and professional consultants, thus one criteria is not suitable to choose between Monthly GSTR 3B & R1 V/S QRMPs. Here we have cover some aspects which may help you to choose that you should go for GST compliance & return filing system.
Preference Table of QRMP Scheme To/From Monthly System
GSTR- 1
| Point of Comparison | QRMPs | Monthly System | Preferable |
| Total number of GSTR 1 to be filed annually | 4 | 12 | QRMPs |
| To file IFF/GSTR-1 | Monthly Optional IFF & Quarterly Mandatory GSTR-1 | Mandatory Monthly GSTR-1 | QRMPs |
| Delayed filing of Monthly IFF/GSTR 1 | Can’t file IFF after due date | GSTR 1 can be filed even after due date | Monthly System |
| Preparation of HSN Wise Summary, Exempt & NIL rated supplies details, State Wise & Rate Wise unregistered B2C details & documents list of Invoice No. & Credit Notes No. | Quarterly | Monthly | QRMPs |
| Late Fees to be born for delayed GST Return filling | Low chances since less no. of returns | Higher chances | QRMPs |
| Due Date for Monthly IFF/GSTR-1 | 13th | 11th | QRMPs |
| Preferable method of Filing for high no. of B2C Customers | Combined reporting in GSTR-1 at quarter end | – | QRMPs |
| Preferable method of Filing for High no. of B2B Customers / Export Sales | Since can’t file IFF after due date | Prefer to opt Monthly GSTR-1, rather than Monthly IFF | Monthly System |
| Reconciliation of Book with GST Returns filed | Little bit complicated | Easy to reconcile because of availability on monthly returns filed figures | Monthly System |
GSTR-3B
| Total no.of GSTR 3B to be filed annually | 4 | 12 | QRMPs |
| Reconciliation of GSTR 2A/ 2B for Input tax credit claimin | In case “Fixed Sum Method” for tax payment is being opted, then GSTR 2A & GSTR 2B to be reconciled on quarterly basis for availing ITC at the time of filling Quarterly GSTR 3B. However in case of “Self-Assessment Method” is being chosen, then monthly reconciliation to be done for availing ITC & discharging Tax Liability. | Monthly Reconciliation | QRMPs |
| Late Fees to be born for delayed GST Return filling | Low chances since less number of returns | Higher chances | QRMPs |
| IGST Refund processing for Export of Goods on the payment of Tax basis. | Delayed i.e. Quarterly | Faster i.e. Monthly | Monthly GSTR3B |
| Preparation of NIL rated supplies details and Exempt, State Wise unregistered B2C supplies & Inward Exempt and details of Composition Dealer | Quarterly | Monthly | QRMPs |
Tax Payment
| Due date for Monthly Payment of Tax | 25th for 1st Two Months of Quarter | 22nd/24th (as applicable for Particular State) | QRMPs |
| Interest Levy for Tax Short Deposit in First 2 months of every quarter | Not applicable in case payment by “Fixed Sum Method” which is 35% Challan Basis, as actual amount of Tax Payable may be greater, than being paid only 35% basis. | Applicable | QRMPs |
| Working Capital Management | Monthly option to choose between Self-Assessment Method & Fixed Sum Method, depending upon availability of Fund | Essential Self-Assessed Payment on monthly basis | QRMPs |
| Tax Liability Computation & reconciliation with Books of accounts | Little complicated & more prone to errors, since you have to note down the method adopted for Tax payment and compute self-assessed liability | Easy & well adopted as auto computed by GSTR 3B on monthly basis | Monthly GSTR 3B |
| Input Credit Ledger Balance (ITC b/f & c/f) | More reliance on quality of books/records maintained | Auto-updation in electronic credit ledger on monthly basis | Monthly GSTR 3B |
| Refund to be applied for Excess Cash Payment in case of “Fixed Sum Method” of Tax Payment | Fixed Sum method of Tax Payment (i.e.35%) may result in Higher tax payment than actual tax liability and that can be refunded after filling quarterly returns. | No such case | Monthly GSTR 3B |
| Tax payer with Higher ITC credit Balances | Prefer to opt QRMPs, since no monthly outflow & tax compliances | Monthly compliances /returns filing | QRMPs |
Other Aspects
| Compliance cost for payment to accountant & tax professional | Lower | Higher | QRMPs |
| Filling GST Returns and burden of compliance for Tax Professional | Less | More | QRMPs |
| For Tax Professional, Returns and compliance burden | Higher Workload as many Quarterly Returns filed till 31st Dec. 2020, tend to opt IFF to be filed now on month to month basis. | Higher since Quarterly Return Filer to opt Monthly GSTR-1 | Monthly GSTR-1 |
Conclusion
Both the schemes are quite comprehensive, with their own pros & cons. Hence one can choose both of them depending upon situation of particular firm/client and quality of resources available. As the option to choose can be changed every quarter, you can amend the earlier choice based on current facts and circumstances.