Which option to choose between QRMP scheme v/s. Monthly GSTR 3B system?
This article explains various aspects of comparison of newly introduced QRMPs scheme versus Monthly GSTR 3B system (QRMP v/s. Monthly 3B)
To reduce tax compliance burden on MSME entities, Govt. has introduced QRMPs w.e.f 01/01/2021. Since this is new scheme launched by government, many GST registered entities are still confused about which scheme to opt in/out, as QRMP is optional scheme which can be opted by GST registered entity with Turnover upto 5 crores. This article explains comparative analysis of various features of both QRMPs and Monthly Return Filing Scheme as well as differentiate between QRMPs v/s. Monthly 3B.
Both the schemes have its own merits and demerits, hence it is better to understand both the scheme well before opting the relevant one that is preferable to you/your client. Since there are wide difference in every business due to different models, availability of funds, payment terms with customers and suppliers, availability of skilled staff and professional consultants , hence one criteria can’t be adopted to choose between Monthly GSTR 3B & R1 v/s. QRMPs. However, we have tried to cover many aspects which may help you out to choose that right direction for GST compliance & return filing system.
Preference Table of QRMP Scheme To/From Monthly System
| Sr. | Point of Comparison | QRMPs | Monthly System | Preferable |
| GSTR- 1 | ||||
| 1 | Total number of GSTR 1 to be filed annually | Four | Twelve | QRMPs |
| 2 | To file IFF/GSTR-1 | Monthly Optional IFF & Quarterly Mandatory GSTR-1 | Mandatory Monthly GSTR-1 | QRMPs |
| 3 | 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 |
| 4 | Preparation of HSN Wise Summary, Exempt & NIL rated supplies details, State Wise & Rate Wise unregistered B2C details & documents list of Invoice Numbers & Credit Notes Numbers | Quarterly | Monthly | QRMPs |
| 5 | Late Fees to be born for delayed filing of GST Return | Low chances since less number of returns | Higher chances | QRMPs |
| 6 | Due Date for Monthly IFF/GSTR-1 | 13th | 11th | QRMPs |
| 7 | Preferable Mode of Filing for High number of B2C Customers | Combined reporting in GSTR-1 at quarter end | – | QRMPs |
| 8 | Preferable Mode of Filing for High number 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 |
| 9 | Reconciliation of Books with GST Returns filed | Little bit complicated | Easy to reconcile because of availability on monthly returns filed figures | Monthly System |
| GSTR-3B | ||||
| 10 | Total number of GSTR 3B to be filed annually | Four | Twelve | QRMPs |
| 11 | Reconciliation of GSTR 2B/2A for claiming ITC | 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 Quarterly GSTR 3B filing. However in case of “Self Assessment Method” is being opted, then monthly reconciliation to be done for availing ITC & discharging Tax Liability | Monthly Reconciliation | QRMPs |
| 12 | Late Fees to be born for delayed filing of GST Return | Low chances since less number of returns | Higher chances | QRMPs |
| 13 | Processing of IGST Refund for Export of Goods on the payment of Tax basis. | Delayed i.e. Quarterly | Faster i.e. Monthly | Monthly GSTR 3B |
| 14 | Preparation of details of Exempt & NIL rated supplies, State Wise unregistered B2C supplies & Inward Exempt & Composition Dealer details | Quarterly | Monthly | QRMPs |
| Tax Payment | ||||
| 15 | Due date for Monthly Payment of Tax | 25th for 1st Two Months of Quarter | 22nd/24th (as applicable for Particular State) | QRMPs |
| 16 | Interest Levy for Short Deposit of Tax in First Two months of every quarter | Not applicable in case payment by “Fixed Sum Method” i.e. 35% Challan Basis, as actual amount of Tax Payable may be higher, than being paid only 35% basis. | Applicable | QRMPs |
| 17 | Management of Working Capital | Monthly option to choose between Self Assessment Method & Fixed Sum Method, depending upon availability of Fund | Mandatory Self Assessed Payment on monthly basis | QRMPs |
| 18 | Computation of Tax Liability & reconciliation with Books of accounts | Little complicated and 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 |
| 19 | Input Credit Ledger Balance (ITC b/f and c/f) | More reliance on quality of books/records maintained | Auto updation in electronic credit ledger on month to month basis | Monthly GSTR 3B |
| 20 | 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 payment of tax than actual tax liability and that can be refunded after quarterly returns filing. | No such case | Monthly GSTR 3B |
| 21 | Tax payer with Higher ITC credit Balances | Prefer to opt QRMPs, since no monthly outflow & tax compliances | Monthly compliances /returns filing | QRMPs |
| Other Aspects | ||||
| 22 | Compliance cost for payment to accountant & tax professional | Lower | Higher | QRMPs |
| 23 | GST Returns filing & compliance burden for Tax Payer | Less | More | QRMPs |
| 24 | GST Returns filing & compliance burden for Tax Professional | Higher Workload as many Quarterly Returns filer till 31/12/2020, tend to opt IFF to be filed on monthly basis now. | Higher since Quarterly Return Filer to opt Monthly GSTR-1 | Monthly GSTR-1 |
Conclusion
Both the schemes are quite comprehensive, with their own pros and cons. Hence one can opt in/out depending upon situation of particular firm/client and quality of resources available. As the option to Opt in/out can be changed every quarter, you can amend the earlier choice based on current facts and circumstances.
****
Article Contributed by: CA Sagar Gambhir | FCA, DISA (ICAI), DIRM (ICAI) | casagargambhir@gmail.com
Author can be reached at casagargambhir@gmail.com for any queries, issues & recommendations relating to article. Any feedback for improvement will be highly appreciated.
Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.
Author Bio
Article “Option to choose between QRMP scheme vs. Monthly GSTR 3B?” is very excellent and gives good information. Thanks for information.
The assessees have been migrated automatically without giving an option to exercise. This has been done unilateral way.