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QRMP Scheme Fixed Sum or Self Assessment method

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CRR RR

42 Points Joined October 2024

Hi Sir

While Filing GST Return under QRMP Scheme Could i know which method is preferable

Fixed sum method or Self assessment method

Request you to provide the advantages and disadvantages if any while opting the two methods

Please advise

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9489 Points Joined December 2011

QRMP Scheme The Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme allows taxpayers with an aggregate annual turnover of up to ₹5 crores to file returns quarterly and make monthly payments.

Fixed Sum Method Under this method:

Advantages: 1. _Simplified payment process_: The taxpayer pays a fixed sum of 35% of the total tax paid in the previous quarter.

2. _Reduced compliance burden_: No need to calculate tax liability every month.

1. _Potential overpayment or underpayment_: The fixed sum may not accurately reflect the actual tax liability, leading to overpayment or underpayment.

2. _Interest liability_: If the fixed sum paid is less than the actual tax liability, interest may be payable on the shortfall.

Self-Assessment Method Under this method:

.Advantages: 1. _Accurate tax payment_: The taxpayer calculates and pays the actual tax liability every month, reducing the risk of overpayment or underpayment.

2. _Avoidance of interest liability_: By paying the actual tax liability, the taxpayer avoids interest liability on any shortfall.

1. _Increased compliance burden_: The taxpayer must calculate tax liability every month, which can be time-consuming and require additional resources.

2. _Complexity in calculation_: The taxpayer must accurately calculate tax liability, taking into account various factors such as input tax credit, exemptions, and tax rates.

Recommendation Choose the Self-Assessment Method if:

1. _You have a complex tax situation_: With multiple inputs, exemptions, or tax rates, self-assessment can help ensure accurate tax payment.

2. _You want to avoid potential interest liability_: By paying the actual tax liability, you can avoid interest liability on any shortfall.

Choose the Fixed Sum Method if:

1. _You have a simple tax situation_: With a straightforward tax situation, the fixed sum method can simplify the payment process.

2. _You want to reduce compliance burden_: The fixed sum method can reduce the need for monthly tax calculations.

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