Option to choose between QRMP scheme and Monthly GSTR 3B

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
QRMPsMonthly
System
Preferable
Total number of GSTR 1
to be filed annually
412QRMPs
To file IFF/GSTR-1Monthly Optional IFF &
Quarterly Mandatory
GSTR-1
Mandatory
Monthly GSTR-1
QRMPs
Delayed filing of Monthly IFF/GSTR 1Can’t file IFF after due dateGSTR 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.
QuarterlyMonthlyQRMPs
Late Fees to be born for delayed GST Return fillingLow chances since less no. of returnsHigher chancesQRMPs
Due Date for Monthly
IFF/GSTR-1
13th11thQRMPs
Preferable method of Filing
for high no. of B2C
Customers
Combined reporting in GSTR-1 at quarter endQRMPs
Preferable method of Filing
for High no. of B2B
Customers / Export Sales
  Since can’t file IFF after due datePrefer to opt Monthly GSTR-1, rather than Monthly IFF  Monthly System
Reconciliation of Book
with GST Returns filed
Little bit complicatedEasy to reconcile because of availability on monthly returns filed figuresMonthly System

GSTR-3B

Total no.of GSTR 3B to be filed
annually
412QRMPs
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 ReconciliationQRMPs
Late Fees to be born for delayed GST
Return filling
Low chances since less
number of returns
Higher chancesQRMPs
IGST Refund processing for Export of Goods
on the payment of Tax basis.
  Delayed i.e. QuarterlyFaster i.e. MonthlyMonthly GSTR3B                               
Preparation of NIL rated supplies details and Exempt, State Wise
unregistered B2C supplies &
Inward Exempt and details of Composition Dealer
QuarterlyMonthlyQRMPs

Tax Payment

Due date for Monthly Payment of Tax 25th for 1st Two Months of Quarter22nd/24th  (as applicable for
Particular State)               
QRMPs
Interest Levy for Tax Short Deposit in First 2 months of every quarterNot 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 ManagementMonthly 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 accountsLittle 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 basisMonthly GSTR 3B
Input Credit Ledger Balance (ITC b/f & c/f)More reliance on quality of books/records maintainedAuto-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 caseMonthly GSTR 3B               
Tax payer with Higher ITC credit BalancesPrefer to opt QRMPs, since no monthly outflow &
tax compliances
Monthly compliances
/returns filing
QRMPs

Other Aspects

Compliance cost for payment to accountant & tax professionalLowerHigher  QRMPs
Filling GST Returns and burden of compliance for Tax ProfessionalLessMore    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.

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