Who Can File Quarterly GST Return?

In India, the Goods and Services Tax (GST) is one of the most significant tax reforms aimed at simplifying the indirect tax structure. One of the compliance measures under GST is the filing of returns, which needs to be done periodically. For most taxpayers, filing returns is a monthly task. However, under certain conditions, a taxpayer can opt for filing quarterly returns. This option is highly beneficial for small businesses as it reduces their compliance burden. In this blog, we will explore the concept of quarterly GST returns in detail, focusing on who can file quarterly GST returns, the eligibility criteria, and how this impacts businesses.

Understanding the GST Return Filing System

Before diving into who can file quarterly GST returns, it is essential to understand the basic structure of GST return filing. Every registered taxpayer under the GST regime is required to file returns to report sales, purchases, input tax credits, and tax liabilities. The filing frequency—monthly or quarterly—depends on the type of taxpayer and the aggregate turnover of their business.

The government offers quarterly return filing options under the QRMP Scheme (Quarterly Return Monthly Payment Scheme). This scheme is designed for small businesses to file their returns less frequently while ensuring that tax payments are made monthly.

What is a Quarterly GST Return?

A quarterly GST return allows eligible taxpayers to submit their GST returns once every three months instead of every month. This reduces the burden of frequent return filing for small and medium-sized businesses. However, it is important to note that while the returns are filed quarterly, the payment of taxes still has to be made on a monthly basis under the QRMP Scheme. This method ensures that the government receives tax payments regularly while providing some relief to businesses from the paperwork.

Who Can File Quarterly GST Return?

There are certain taxpayers that can opt for quarterly GST return filing, and these criteria are based mainly on the annual aggregate turnover of the business.

According to GST regulations, businesses with an aggregate turnover of up to ₹5 crores in the previous financial year can opt for the quarterly return filing. This turnover limit is calculated as the total value of all taxable supplies (excluding GST) made by a registered taxpayer.

If a taxpayer’s turnover exceeds ₹5 crores during the financial year, they will no longer be eligible for the quarterly return option. In such cases, they will be required to switch back to monthly return filing.

Eligibility for Quarterly GST Return: In Detail

1. Turnover Limit: As mentioned, the taxpayer must have an aggregate turnover of up to ₹5 crores in the previous financial year. It is important to regularly check turnover figures, as exceeding this limit disqualifies the business from quarterly filing.
2. Registration Status: Only registered taxpayers under the regular GST scheme (not composition taxpayers) can opt for quarterly filing under the QRMP scheme. Composition taxpayers, who already file returns on a quarterly basis under GSTR-4, are not eligible for this scheme.
3. Return Filing Compliance: The taxpayer should be compliant with return filing in the previous periods. Non-compliance or delay in filing earlier GST returns may affect the eligibility to opt for quarterly returns.
4. Option Selection: Taxpayers must select the quarterly return filing option online on the GST portal at the beginning of each quarter. This means businesses can decide whether to file quarterly or monthly based on their preferences, as long as they meet the eligibility criteria.

Benefits of Quarterly GST Return Filing

The option to file GST returns quarterly is beneficial for eligible taxpayers in several ways:

1. Reduced Compliance Burden: Small businesses often find monthly return filing to be a burden as it involves substantial paperwork and documentation. Filing quarterly returns allows businesses to focus more on operations rather than compliance.
2. Cost-Effective: Monthly filing of returns often requires businesses to hire accountants or tax professionals, leading to additional costs. With quarterly returns, these costs can be reduced as the frequency of return preparation decreases.
3. Time-Saving: Small business owners who manage their own tax filings find that quarterly returns save significant time. The process of gathering information, reviewing, and filing returns every month is time-consuming. Filing only four returns per year reduces this workload considerably.
4. Flexibility in Tax Payments: Although returns are filed quarterly, businesses still need to make tax payments monthly. The QRMP scheme provides flexibility in tax payment methods, allowing businesses to pay based on self-assessed liabilities or through the fixed sum method.

How to Opt for Quarterly GST Return Filing

Opting for quarterly GST returns is a straightforward process and can be done via the GST portal. Here’s how eligible taxpayers can choose to file their returns quarterly:

1. Log in to the GST Portal: Taxpayers need to log in to the GST portal using their credentials.
2. Select Quarterly Option: In the dashboard, there is an option to select the quarterly return filing frequency. Taxpayers can choose this option at the beginning of each quarter.
3. Confirm the Selection: Once the quarterly filing option is selected, the system will ask for confirmation. After confirmation, the taxpayer will be able to file GSTR-1 and GSTR-3B on a quarterly basis.

Types of Returns Under Quarterly Filing

For taxpayers opting for quarterly return filing under the QRMP Scheme, the following returns are applicable:

1. GSTR-1: This return contains details of outward supplies made during the quarter. Taxpayers are required to file GSTR-1 once every quarter to report their sales and issue invoices to customers.
2. GSTR-3B: This is a simplified summary return that contains information about the taxpayer’s total sales, input tax credits, and tax liabilities. It needs to be filed quarterly under the QRMP scheme.

It’s important to note that while GSTR-3B is filed quarterly, businesses must still make tax payments every month based on their self-assessment or a fixed percentage of the previous month’s tax liability.

QRMP Scheme and Monthly Payments

Even though the returns are filed quarterly, businesses are required to make monthly tax payments under the QRMP scheme. There are two options for making these payments:

1. Fixed Sum Method: Under this method, businesses can make tax payments based on a fixed percentage of the tax paid in the last quarter. This percentage is calculated by the GST system and is displayed in the taxpayer’s dashboard.
2. Self-Assessment Method: Taxpayers who prefer more control over their tax payments can opt for the self-assessment method. Under this option, they calculate their tax liabilities based on the actual supplies made during the month and make payments accordingly.

Late Fees and Penalties

Taxpayers opting for quarterly returns need to be cautious about late fees and penalties. Failing to file quarterly returns on time can lead to hefty penalties. The GST law specifies that for every day a return is delayed, a late fee will be imposed. Additionally, taxpayers will also be liable to pay interest on the tax amount not paid by the due date.

It’s crucial for businesses to ensure timely filing of returns and payment of taxes to avoid such penalties. Despite the relaxation of filing frequency, compliance with deadlines remains essential.

Quarterly vs Monthly GST Return Filing

While quarterly return filing is an excellent option for small businesses, there are pros and cons to consider. Some businesses may prefer monthly filing if they regularly receive input tax credits and want to claim them without delay. On the other hand, businesses with fewer transactions may find quarterly filing more convenient.

Let’s compare the two options:

• Quarterly Filing:
  • Fewer returns to file (only four per year).
  • Suitable for businesses with less frequent transactions.
  • Monthly tax payments still required.
• Monthly Filing:
  • Suitable for larger businesses with frequent transactions.
  • Allows for faster claim of input tax credits.
  • More administrative work and higher compliance burden.

Impact of Quarterly GST Return Filing on Small Businesses

Quarterly GST return filing is a game-changer for small businesses in India. With reduced compliance and a focus on simplified tax management, small businesses can dedicate more time to growth and less time to administrative work. Additionally, the flexibility in choosing between quarterly and monthly filing allows businesses to opt for what suits their needs best.

Also Read

• 
  GST Return Filing Process Step by Step
  In today’s fast-paced business world, it’s essential for every company to follow tax rules. One significant tax system in India is Goods and Services Tax (GST). Its goal is to make taxes simpler and more consistent across the country’s… Read more: GST Return Filing Process Step by Step
• 
  Smooth Transition: NOC Format for GST Registration
  In the world of business, transitions are inevitable. Whether it’s expanding your operations, changing your business structure, or even just registering for new licenses and permits, each step requires careful consideration and adherence to legal requirements. When it comes… Read more: Smooth Transition: NOC Format for GST Registration
• 
  GST Registration Cancellation Letter Format
  Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Under the GST regime, businesses are required to register themselves to comply with tax regulations. However, there might be… Read more: GST Registration Cancellation Letter Format
• 
  GST Invoice Software: Making Billing Easy
  In today’s busy world of business, being efficient is super important. One big thing that needs to be super efficient is billing. With new technology, old-fashioned manual billing is out of date and can make a lot of mistakes.… Read more: GST Invoice Software: Making Billing Easy
• 
  How to GST Return Status Check Online?
  The Goods and Services Tax (GST) is a significant taxation system in India that has simplified the complex tax structure by integrating multiple taxes into a single tax regime. This system has been designed to be seamless and efficient,… Read more: How to GST Return Status Check Online?

Frequently Asked Question