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Monthly Vs. Quarterly GSTR-1 Filing: A Straightforward Guide For Businesses
Abhinandan Banerjee • November 2, 2024
Filing GSTR-1 returns is a crucial part of GST (Goods and Services Tax) compliance in India. As a registered business, you must regularly report details of your outward supplies (sales) of goods and services to the government. However, businesses have the option to file GSTR-1 on either a quarterly or monthly basis, a decision based mainly on their annual turnover. Choosing the right filing frequency can streamline your compliance process and improve your business's overall financial management. This blog aims to demystify the differences between quarterly and monthly GSTR-1 filing, using insights and official data from government sources, to assist businesses in making an informed choice.
Understanding GSTR-1: The Outward Supply Return
GSTR-1 is a detailed statement of all the outward supplies made by your business within a given tax period. It includes essential information like:
- Invoice number and date
- HSN/SAC code of goods or services supplied
- Place of supply
- Customer's GSTIN (if applicable)
- Taxable value of the supply
- Applicable GST rate (CGST, SGST, IGST)
- Total GST amount collected
Monthly GSTR-1 Filing
Generally, businesses with an annual turnover exceeding Rs. 5 crores are mandated to file GSTR-1 returns on a monthly basis. This ensures timely tax collection by the government and helps track larger businesses more closely.
- Due Date: The due date for filing monthly GSTR-1 is the 11th of the following month. For instance, the GSTR-1 for supplies made in July must be filed by August 11th. (Source: [invalid URL removed])
Quarterly GSTR-1 Filing (QRMP Scheme)
The Quarterly Return Filing & Monthly Payment of Taxes (QRMP) scheme was introduced by the government to ease compliance burdens for smaller businesses. Businesses with an annual turnover up to Rs. 5 crores can opt for this scheme, allowing them to file their GSTR-1 returns quarterly, while making tax payments monthly.
- Due Date: The due dates for quarterly GSTR-1 vary based on the quarter:
- Quarter 1 (April - June): 13th August
- Quarter 2 (July - September): 13th November
- Quarter 3 (October - December): 13th February
- Quarter 4 (January - March): 13th May (Source: [invalid URL removed])
Key Differences: Quarterly vs. Monthly GSTR-1
Feature | Quarterly GSTR-1 (QRMP Scheme) | Monthly GSTR-1 |
Turnover Threshold | Up to Rs. 5 crores annual turnover | Above Rs. 5 crores annual turnover |
Filing Frequency | Quarterly | Monthly |
Tax Payment Frequency | Monthly (through Form PMT-06) | Monthly |
Due Dates | Vary by quarter; generally the 13th of the month following the quarter | 11th of the month following the tax period |
Late Filing Penalty | Interest and late fees as applicable | Interest and late fees as applicable |
Pros and Cons of Quarterly vs. Monthly Filing
Quarterly GSTR-1 (QRMP Scheme)
- Pros:
- Reduced administrative burden.
- More time for preparing and filing returns.
- Improved cash flow management due to monthly tax payments.
- Cons:
- Can lead to large outstanding tax liabilities at quarter-end.
- Potential delays in resolving invoice mismatches due to longer reconciliation cycles.
Monthly GSTR-1
- Pros:
- Smaller, more manageable tax liabilities.
- Faster reconciliation and error resolution.
- Consistent compliance workflow throughout the year.
- Cons:
- Increased administrative and compliance burden.
- Reduced flexibility in cash flow management.
Factors to Consider When Choosing
- Turnover: Your annual turnover primarily dictates your eligibility for quarterly filing (through QRMP). However, even with lower turnover, you may opt for monthly filing if it suits your business better.
- Nature of Business: If your business involves frequent and high-volume transactions, monthly filing may be more suitable to avoid last-minute complexities.
- Complexity of Supplies: If you deal with a wide range of products or services with varying tax rates, monthly filing could simplify tax calculations and minimize errors.
- Resource Availability: Assess if you have the time, resources, and accounting systems to manage monthly GST filings.
Conclusion
The choice between quarterly and monthly GSTR-1 filing ultimately depends on your business's unique requirements and operational preferences. Thoroughly analyze the pros and cons of each, keeping in mind your turnover, business nature, and resource capabilities to make an optimal decision. While the QRMP scheme offers significant advantages for smaller businesses, remember that compliance and timely tax remittance are essential for every business, regardless of the chosen filing frequency.
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Abhinandan Banerjee
(Associate Manager - Marketing)
Abhinandan is a dynamic Product and Content Marketer, boasting over seven years of experience in crafting impactful marketing strategies across diverse environments. Known for his strategic insights, he propels digital growth and boosts brand visibility by transforming complex ideas into compelling content that inspires action.
