The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme under the Goods and Services Tax (GST) regime has significantly transformed the way small taxpayers in India manage their tax obligations. Specifically designed for businesses with a turnover of less than Rs.5 crores, QRMP simplifies the GST compliance process. In this blog, we’ll dive into understanding QRMP Part 2 GSTR-1 contents, exploring its components, inclusions, and providing a detailed understanding of its contents.
Further, we will provide a QRMP GSTR-1 Part 2 detailed overview, offering insights into how this scheme specifically caters to the unique needs of small businesses and breaks down the operational aspects to ensure clarity and comprehensive understanding.
Understanding QRMP GSTR-1 Part 2
The Structure
QRMP Part 2 GSTR-1, a pivotal element of the QRMP scheme, offers a balanced approach to tax filing for eligible taxpayers. Let’s consider a hypothetical company, ABC Pvt Ltd, to illustrate the structure and understand QRMP GSTR-1 Part 2 in-detail:
- Quarterly GSTR-3B Filing: ABC Pvt Ltd, with its small business scale, can file GSTR-3B returns every quarter instead of monthly. This approach reduces the frequency of filing, aiding in administrative efficiency.
- Monthly Tax Payments: Despite quarterly filings, ABC Pvt Ltd is required to make tax payments each month, aiding in better cash flow management and preventing large tax outflows at the end of the quarter.
- Compliance Burden: This dual approach eases the compliance burden on ABC Pvt Ltd by spreading out its tax responsibilities in a more manageable way.
Invoice Furnishing Facility (IFF)
One of the most significant inclusions in QRMP GSTR-1 Part 2 is the Invoice Furnishing Facility (IFF). This optional facility offers substantial benefits for invoice management:
- Functionality: It allows ABC Pvt Ltd to upload B2B invoice details, crucial for both inter-state and intra-state transactions, including debit and credit notes.
- Limitations: ABC Pvt Ltd can upload invoices up to Rs. 50 lakh per month. This cap ensures that the system is not overloaded and remains efficient.
- Impact on Recipients: The invoices uploaded by ABC Pvt Ltd in IFF are reflected in their recipients’ GSTR-2A, GSTR-2B, GSTR-4A, or GSTR-6A, facilitating seamless input tax credit flow.
Payment Methods and Compliance
The QRMP scheme introduces two primary methods for tax payment – the Fixed Sum Method (FSM) and the Self-Assessment Method (SAM). FSM is guided by a pre-filled challan (GST PMT-06), commonly known as the 35% challan, whereas SAM involves paying the actual tax due based on tax liability and available input tax credit.
Fixed Sum Method (FSM)
- Mechanism: Under FSM, ABC Pvt Ltd will utilize a pre-filled challan, GST PMT-06, often referred to as the 35% challan.
- Calculation Example: If ABC Pvt Ltd paid Rs. 1,00,000 in taxes in the previous quarter, under FSM, it would pay 35% of this amount (Rs. 35,000) monthly for the first two months of the current quarter.
Self-Assessment Method (SAM)
- Mechanism: SAM allows ABC Pvt Ltd to pay the actual tax due, considering both the tax liability on its supplies and the available input tax credit.
- Hypothetical Scenario: Suppose in a particular month, ABC Pvt Ltd’s tax liability is Rs. 40,000 and it has an available input tax credit of Rs. 10,000. Using SAM, the company would only need to pay Rs. 30,000.
| Component | Description | Relevance to ABC Pvt Ltd |
| Invoice Furnishing Facility (IFF) | An optional facility that allows taxpayers to upload B2B invoice details, capped at Rs. 50 lakh per month. These details reflect in the recipient’s various GSTR forms. | Useful for ABC Pvt Ltd to manage B2B invoices efficiently, facilitating timely input tax credit to recipients. |
| Fixed Sum Method (FSM) | A pre-filled challan (GST PMT-06), commonly known as the 35% challan, used for tax payment. Calculated as a percentage of previous tax payments. | If ABC Pvt Ltd paid Rs. 1,00,000 in taxes last quarter, it would pay Rs. 35,000 monthly under FSM. |
| Self-Assessment Method (SAM) | Taxpayers pay the actual tax due, considering the liability on supplies and available input tax credit. | Suitable for ABC Pvt Ltd when its tax liability and credit vary significantly each month. |
This table provides a succinct comparison of the main components of QRMP Part 2 GSTR-1, aiding in decision-making and compliance for businesses like ABC Pvt Ltd.
Complying With QRMP GSTR-1 Part 2
Cloud-based tax filing platforms have revolutionized the way businesses comply with GST regulations, particularly under the QRMP scheme. These platforms not only simplify the filing process but also ensure accuracy and timeliness. Below is a detailed, step-by-step guide on how businesses can use these platforms to comply with QRMP GSTR-1 Part 2.
Step 1: Setting Up and Choosing the Right Platform
The first step in complying with QRMP GSTR-1 Part 2 is selecting a suitable cloud-based tax filing platform. Businesses should look for features like user-friendly interfaces, comprehensive GST compliance tools, and robust security measures. Once chosen, they need to set up their account by entering business details and GSTIN.
Step 2: Updating Return Filing Frequency
Once the account is set up, the next step is to update the return filing frequency. This is crucial for businesses transitioning from a monthly to a quarterly filing schedule under the QRMP scheme.
- Navigating to Settings: Businesses should locate the settings or preferences section in the platform.
- Updating Frequency: Here, they can update their return filing frequency from monthly to quarterly, aligning with the QRMP scheme’s requirements.
Step 3: Opting for QRMP and Managing IFF
After updating the filing frequency, businesses must formally opt for the QRMP scheme within the platform.
- Selecting QRMP Option: Most platforms will have a clear option to select the QRMP scheme.
- Managing IFF: If applicable, businesses should also manage their Invoice Furnishing Facility (IFF) through the platform. This involves uploading relevant B2B invoice details, ensuring they don’t exceed the Rs. 50 lakh per month limit.
Step 4: Navigating GSTR-1 Return Filing
The final step involves the actual preparation and filing of the GSTR-1 return.
- Accessing GSTR-1 Form: Users should navigate to the GST return filing section and select the GSTR-1 form for the relevant quarter.
- Filling Details: Here, businesses will fill in their sales details, including both B2B and B2C transactions. The platform often auto-populates some data based on previous entries or IFF uploads, which should be thoroughly reviewed for accuracy.
- Submission and Confirmation: Once all details are correctly entered, businesses can submit the form. They should receive a confirmation along with a reference number, indicating successful submission.
Detailed Checklist: Key Items Covered in QRMP GSTR-1 Part 2
QRMP GSTR-1 Part 2 addresses various critical items, including the reporting of B2B and B2C supplies. Below is a detailed checklist, providing clarity on the items covered in QRMP GSTR-1 Part 2, and what needs to be reported and how it should be handled, particularly focusing on B2B and B2C supplies.
| Item | Description | Action Required |
| B2B Supplies | Business-to-Business transactions where both parties are registered under GST. | Report Monthly via IFF: B2B supplies should be reported monthly through the Invoice Furnishing Facility (IFF) for the first two months of a quarter. This ensures the seamless flow of input tax credit to the recipients. |
| B2C Supplies | Business-to-Consumer transactions where the recipient is not registered under GST. | Report Quarterly in FORM GSTR-1: B2C supplies are not required to be declared in IFF. Instead, they should be reported in FORM GSTR-1 for the entire quarter. |
| Debit and Credit Notes for B2B | Adjustments or corrections in B2B transactions, often due to returns, discounts, or corrections. | Include in Monthly IFF: If these notes are related to B2B supplies, they should be included in the IFF reporting for the respective month. |
| Debit and Credit Notes for B2C | Similar adjustments for B2C transactions. | Include in Quarterly GSTR-1: For B2C supplies, these adjustments should be reflected in the quarterly FORM GSTR-1 filing. |
| Inward Supplies (Purchases) | All purchases and inward supplies made by the business. | No Monthly Reporting in IFF: Inward supplies are not reported through IFF but are critical for calculating input tax credit in the GSTR-3B form. |
| Tax Payment Details | Information regarding GST payments made. | Monthly Payment Required: Under QRMP, tax payments are to be made monthly, either through the Fixed Sum Method (FSM) or the Self-Assessment Method (SAM). |
Conclusion
QRMP GSTR-1 Part 2 offers a practical way for small businesses to handle GST. It combines filing returns every quarter with paying taxes monthly, making tax management easier. Features like the Invoice Furnishing Facility and different payment methods give more control. Clear rules on reporting sales simplify the process. In summary, QRMP GSTR-1 Part 2 is a helpful tool for small businesses to manage taxes effectively, allowing them to focus more on their core business activities. Keeping up with these guidelines is essential for smooth and hassle-free tax handling.
Frequently Asked Questions (FAQs)
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What are the key components of QRMP Part 2 GSTR-1?
The components of QRMP Part 2 GSTR-1 include quarterly GSTR-3B filings, monthly tax payments, Invoice Furnishing Facility (IFF), and different tax payment methods like FSM and SAM. This structure helps small businesses manage GST compliance efficiently.
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What does the Invoice Furnishing Facility (IFF) in QRMP GSTR-1 Part 2 include?
IFF, a vital inclusion in QRMP GSTR-1 Part 2, allows taxpayers to upload B2B invoice details monthly. It’s designed for invoices up to Rs. 50 lakh per month, ensuring smooth input tax credit for recipients.
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How can I better understand the contents of QRMP Part 2 GSTR-1?
Understanding QRMP Part 2 GSTR-1 involves knowing its structure, like quarterly filings, monthly payments, and the use of IFF. Familiarity with these components eases the GST filing process.
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What items are covered under QRMP GSTR-1 Part 2?
Items covered in QRMP GSTR-1 Part 2 include B2B and B2C supplies, tax payment details, and invoice information for IFF. Understanding these items is crucial for accurate GST compliance.
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Are B2C supplies included in the IFF under QRMP GSTR-1 Part 2?
No, B2C supplies are not included in IFF. They are reported in the quarterly GSTR-1, which is a key distinction in QRMP GSTR-1 Part 2’s structure.
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How does QRMP GSTR-1 Part 2 simplify GST filing for small businesses?
By allowing quarterly GSTR-3B filings and providing the IFF for B2B invoices, QRMP GSTR-1 Part 2 simplifies GST compliance, making it more manageable for small businesses.
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What are the payment methods in QRMP GSTR-1 Part 2?
The payment methods in QRMP GSTR-1 Part 2 include FSM, where tax is paid as a percentage of previous payments, and SAM, based on actual tax liability.
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Is it mandatory to use the IFF in QRMP GSTR-1 Part 2?
No, using the IFF in QRMP GSTR-1 Part 2 is optional. It’s designed for taxpayers who want to upload B2B invoices monthly for efficient input tax credit flow to recipients.
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Can I switch back to monthly filing after opting for QRMP GSTR-1 Part 2?
Yes, businesses can switch back to monthly filing from QRMP GSTR-1 Part 2. This flexibility is a key component of the scheme, allowing businesses to choose the filing frequency that best suits their operational needs. To switch, businesses must update their preference in the GST portal within the specified timelines, usually at the beginning of a quarter.
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What happens if I exceed the Rs. 50 lakh limit in the IFF under QRMP GSTR-1 Part 2?
If your business exceeds the Rs. 50 lakh limit in the IFF under QRMP GSTR-1 Part 2, the excess invoices cannot be uploaded through IFF. These additional invoices should be reported in the regular quarterly GSTR-1 filing. It’s important to monitor and manage invoices carefully to utilize the IFF efficiently and maintain compliance.
