Monthly vs Quarterly GST Return – Which is Better? (Complete Guide for Businesses)
Goods and Services Tax (GST) compliance is an essential part of running a business in India. Every registered taxpayer must regularly file GST returns to report their sales, purchases, and tax liability. One of the most common questions among small and medium businesses is whether they should file monthly GST returns or quarterly GST returns.
Choosing the correct GST filing option can significantly impact compliance workload, cash flow management, and administrative costs. Many small taxpayers are eligible to file GST returns quarterly under the QRMP (Quarterly Return Monthly Payment) Scheme, while others must continue filing monthly returns.
In this comprehensive guide, we will explain the difference between monthly and quarterly GST returns, eligibility criteria, advantages, disadvantages, and which option may be better for your business.
What is GST Return Filing?
A GST return is a document that contains details of a taxpayer’s:
Sales (outward supplies)
Purchases (inward supplies)
Input Tax Credit (ITC) claimed
GST liability payable to the government
These returns must be filed electronically through the GST portal managed by the Goods and Services Tax Network under the supervision of the Central Board of Indirect Taxes and Customs.
GST returns help the government track tax collection and ensure transparency in business transactions.
Types of GST Returns for Regular Taxpayers
Regular taxpayers generally file the following GST returns:
GSTR-1
This return contains details of outward supplies (sales) made by the taxpayer.
GSTR-3B
This is a summary return that includes tax liability, input tax credit, and final tax payment.
Depending on the scheme selected, these returns may be filed either monthly or quarterly.
What is Monthly GST Return Filing?
Under the regular GST scheme, businesses are required to file GST returns every month.
This includes:
Filing GSTR-1 monthly
Filing GSTR-3B monthly
Businesses must also pay their GST liability every month.
Who Must File Monthly GST Returns?
Monthly GST return filing is mandatory for:
Businesses with annual turnover above ₹5 crore
Businesses not eligible for the QRMP scheme
Companies with high transaction volumes
Businesses requiring frequent input tax credit reconciliation
Monthly filing ensures that GST data is updated regularly and input tax credit flows smoothly across the supply chain.
What is Quarterly GST Return Filing?
Quarterly GST return filing is available under the QRMP Scheme (Quarterly Return Monthly Payment).
This scheme was introduced by the Central Board of Indirect Taxes and Customs to simplify compliance for small taxpayers.
Under this scheme:
GSTR-1 is filed quarterly
GSTR-3B is filed quarterly
Tax payment is made monthly
Even though the return is filed quarterly, businesses still pay GST every month through a challan.
Eligibility for QRMP Scheme
Businesses can opt for quarterly return filing if they meet the following conditions:
Annual turnover is up to ₹5 crore
The taxpayer is registered under GST
Previous GST returns have been filed properly
If the turnover exceeds ₹5 crore, the taxpayer must shift to the monthly filing system.
Key Differences Between Monthly and Quarterly GST Returns
| Basis | Monthly GST Filing | Quarterly GST Filing |
|---|---|---|
| Return Filing | Every month | Every quarter |
| Tax Payment | Monthly | Monthly |
| Compliance Work | Higher | Lower |
| Best For | Large businesses | Small businesses |
| Invoice Reporting | Monthly | Quarterly |
| Administrative Burden | Higher | Reduced |
Understanding these differences helps businesses choose the most suitable option.
Advantages of Monthly GST Return Filing
Monthly GST filing offers several benefits for businesses with frequent transactions.
Faster Input Tax Credit Flow
When suppliers file GSTR-1 monthly, buyers receive input tax credit faster. This is important for businesses with complex supply chains.
Better Financial Tracking
Monthly filing ensures that accounting records and tax liabilities are updated regularly.
Businesses can track their GST obligations more efficiently.
Suitable for Large Businesses
Companies with high turnover or multiple transactions may find monthly filing easier to manage because tax calculations are done every month.
Reduced Risk of Errors
When returns are filed monthly, there is less data to reconcile at once, which reduces the chances of mistakes.
Disadvantages of Monthly GST Return Filing
Despite its advantages, monthly filing also has some drawbacks.
Higher Compliance Burden
Businesses must prepare and submit GST returns every month, which increases administrative work.
Increased Professional Costs
Frequent filings may require regular assistance from tax professionals or accountants.
Time-Consuming Process
Small businesses may find monthly compliance difficult to manage along with daily operations.
Advantages of Quarterly GST Return Filing
Quarterly filing was introduced mainly to support small businesses.
Reduced Compliance Work
Instead of filing 12 returns per year, businesses file only 4 returns annually.
This significantly reduces administrative effort.
Lower Professional Costs
Fewer returns mean reduced accounting and compliance expenses.
Better for Small Businesses
Small businesses with limited transactions can manage their GST obligations more comfortably.
Simplified Reporting
Quarterly reporting reduces the need for frequent reconciliation of invoices.
Disadvantages of Quarterly GST Return Filing
Although quarterly filing is convenient, it may not suit every business.
Delayed Input Tax Credit for Buyers
Since invoices are reported quarterly, buyers may experience delays in claiming input tax credit.
Monthly Tax Payment Still Required
Even though returns are filed quarterly, businesses must still pay GST every month.
Not Suitable for Growing Businesses
Businesses experiencing rapid growth or higher transaction volumes may prefer monthly reporting.
GST Return Due Dates
Understanding due dates is crucial to avoid penalties.
Monthly GST Return Due Dates
| Return | Due Date |
|---|---|
| GSTR-1 | 11th of the next month |
| GSTR-3B | 20th of the next month |
Quarterly GST Return Due Dates (QRMP Scheme)
| Return | Due Date |
|---|---|
| GSTR-1 | 13th of the month following the quarter |
| GSTR-3B | 22nd or 24th of the following month depending on the state |
Failure to file returns on time may result in late fees and interest charges.
Late Fees and Penalties for GST Returns
If GST returns are not filed within the prescribed deadlines, penalties may apply.
Late fee generally includes:
₹50 per day for regular returns
₹20 per day for nil returns
Additionally, interest at 18% per annum may apply on delayed tax payments.
Timely compliance helps avoid unnecessary financial penalties.
How to Choose Between Monthly and Quarterly GST Filing
Choosing the right filing frequency depends on several business factors.
Choose Monthly Filing If:
Your turnover exceeds ₹5 crore
You have large transaction volumes
Your customers require regular invoice reporting
Your business deals with large corporates
Choose Quarterly Filing If:
Your turnover is below ₹5 crore
You operate a small or medium business
Your transaction volume is low
You want simplified GST compliance
For many small businesses, quarterly filing under the QRMP scheme offers a balanced solution.
How to Opt for the QRMP Scheme
Eligible taxpayers can opt for the QRMP scheme through the GST portal.
The process generally involves:
Logging into the GST portal
Selecting the QRMP option
Confirming eligibility based on turnover
Submitting the request before the prescribed deadline
Once approved, the taxpayer can start filing GST returns quarterly.
Importance of Proper GST Compliance
Maintaining accurate GST records and filing returns on time is essential for every business.
Benefits of proper GST compliance include:
Avoiding penalties and late fees
Maintaining a good compliance rating
Smooth claim of input tax credit
Better financial transparency
Building credibility with clients and vendors
Professional guidance can help businesses manage GST obligations efficiently.
Conclusion
Choosing between monthly and quarterly GST return filing depends on the size and nature of your business. While monthly filing provides faster reporting and better tax credit flow, quarterly filing under the QRMP scheme reduces compliance burden for small taxpayers.
Businesses with high turnover and complex supply chains usually prefer monthly filing. On the other hand, small businesses with limited transactions benefit from quarterly filing due to simplified compliance.
Before selecting a filing frequency, it is advisable to evaluate your business turnover, transaction volume, and compliance capacity. With the right approach, businesses can ensure smooth GST compliance while focusing on growth and profitability.
Frequently Asked Questions (FAQs)
Who is eligible for quarterly GST return filing?
Businesses with annual turnover up to ₹5 crore can opt for quarterly filing under the QRMP scheme.
Is tax payment also quarterly under the QRMP scheme?
No. Tax must still be paid monthly, even though returns are filed quarterly.
Can I switch between monthly and quarterly GST filing?
Yes. Eligible taxpayers can switch between the two options at the beginning of a quarter through the GST portal.
Which option is better for small businesses?
Quarterly filing is generally better for small businesses because it reduces compliance workload and administrative costs.