Monthly vs Quarterly GST Filing: Which Is Better for MSMEs?

Many businesses get confused while choosing between monthly filing and quarterly filing under GST. Thus, to address their concerns and help them in making informed decisions, here is the full guide on monthly vs quarterly GST returns. 

What is Quarterly GST Filing? 

Most people think of “quarterly filing” when they hear that term; they’re usually referring to the QRMP scheme.

QRMP stands for Quarterly Return with Monthly Payment. In simpler terms, you are required to file the main GST returns every quarter; however, you are still making your tax payments each month.

So, you are filing fewer returns, but you won’t be fully exempted from monthly compliance activity. 

Eligibility for Quarterly GST Filing

In most cases, you are eligible if you satisfy the following criteria:  

Your annual aggregate turnover is of ₹5 crores or less

You have filed your last due GSTR 3B 

Note: If you exceed the limit of ₹5 crore in aggregate turnover in any quarter, you are no longer eligible for the QRMP scheme. 

What Returns to File in Quarterly Filing? 

The following are the returns you have to file: 

This is where things get interesting.

If the nature of your business is B2B and your customers want their input credits to flow through quickly, you might have to upload an invoice every month through IFF (Invoice Furnishing Facility). It is optional; however, a number of MSMEs find it helpful to keep their customers happy and prevent their complaints. You may require GST compliance software to do so. 

Real-life Example 

Imagine you are running a small apparel boutique in Ahmedabad with an annual turnover of ₹3 crore. Under QRMP, you can file GSTR‑1 and GSTR‑3B four times a year, reducing administrative overhead. But you still have to deposit tax every month using PMT‑06. If you fail to pay on time, you risk interest penalties, and your option to continue QRMP may be revoked. 

Pros & Cons of Quarterly GST Filing

Pros:

1. Less return-filing stress

 You will be filing fewer GSTR 1 and GSTR 3B returns, which means fewer deadlines to worry about.

2. A better fit for your business if your business is relatively stable

 If your sales don’t vary greatly on a month-to-month basis, quarterly GST filing would be easier to deal with.

3. More helpful for extremely small teams

 If you do not have a full-time accounting executive and you’re handling GST yourself, quarterly GST filing can be a go-to option for you. 

Cons:

1. Your customers may expect you to upload your invoices monthly

 If you’re a B2B seller, you probably have customers who are going to ask, “Why is this invoice not reflecting?” Ultimately, you may have to use IFF anyway.

2. You will still be paying taxes every month

 Even under the QRMP scheme, you pay taxes every month through a challan process. 

3. Clean-up at the end of each quarter can become overwhelming

Many SMEs procrastinate regular updates of accounting records. Unfortunately, later it becomes a total mess, and it gets difficult to update the records of the whole quarter in one go. 

4. Difficult to catch errors early

If something goes wrong during month one, you are likely to know about it before the end of the quarter. 

What is the Monthly GST Filing? 

Monthly GST filing is for businesses with a gross annual turnover above ₹5 crores. However, even those with lower than ₹5 crores (especially B2B) may choose to opt for monthly filing over quarterly to provide timely ITC credit. Once a company gets registered, this is the default filing schedule. 

The following are the returns you have to file: 

Real-life Example

Assume that you have a manufacturing plant in Gujarat and its annual turnover is ₹8 crore. In this case, you are required to file GST returns every month. Each month, you have to upload your sales invoices (GSTR-1) and file a summary return (GSTR-3B). Your vendors are likely to get ITC quickly in their GSTR-2A/2B. However, your finance department will have to keep deadlines in order to prevent penalties.

Pros and Cons of Monthly GST Filing

Pros

1. No backlogs

Every time you close out the month, you can account for the differences and then start fresh. 

1. Easy to fix mismatches 

In the monthly filing, fixing an invoice mismatch or ITC not reflecting is easier to tackle than in the quarterly filing. 

1. Best for B2B business 

If your buyers see their ITC reflected in the system promptly, it builds trust. 

1. Builds a habit

It becomes routine. Once it becomes a habit, it stops feeling scary.

Cons

1. More frequent deadlines 

The smaller the company, the more stressful it may seem to have a GST deadline to address every month. 

1. Higher chance of late fees

With the increased number of due dates, there is a greater risk of having to pay late fees if you fail to meet the deadlines.

Key Differences Between Monthly and Quarterly Filing

What’s Your Next Move? 

So after reading this blog, the first thing that you should do is calculate your business’s annual aggregate turnover. Once that is done, check your customers and profiles to determine whether they are businesses or end users. After that, you can decide whether monthly filing or quarterly filing is right for your business. If you face any issues while filing a GST return, you’d better start using the best GST software in India. 

Frequently Asked Questions on Monthly vs Quarterly GST Returns

How to change GST return filing monthly to quarterly​? 

If you are eligible for the QRMP scheme, you can switch your filing frequency on the GST Portal. 

Step 1: Log in with your credentials 

Step 2: Go to Services → Returns → Opt in for Quarterly Return

Do I have to file GST every month​? 

Yes, even if there is no business activity in a given month. Still, you have to file a NIL return. 

Is it necessary to file GST every month​?

Not always. You can opt in for quarterly GST filing if you are eligible.