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QRMP Scheme Fixed Sum or Self Assessment method

CRR RR (41 Points)

11 December 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

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (6317 Points)
Replied 12 December 2024

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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