When it comes to GST compliance, one of the key decisions businesses need to make is how often to file their GST returns—monthly or quarterly. This isn’t just about ticking boxes. The frequency of filing can affect your cash flow, working capital, and how smoothly your business runs.
The government allows businesses to choose their return frequency based on certain criteria, mainly turnover. Understanding which option fits your business best starts with knowing the rules and what they mean for your day-to-day operations.
What Are GST Returns?
GST returns are statements a registered business must file with the government to report its sales, purchases, and tax collected or paid. These returns help calculate the tax liability and claim input tax credit (ITC).
The most commonly filed returns are:
- GSTR-1: Contains details of outward supplies (sales).
- GSTR-3B: A summary return showing total tax liability and input tax credit.
Depending on your eligibility, these returns are filed either monthly or quarterly. Let’s break down how each option works.
Monthly GST Returns
Businesses with a turnover above the prescribed limit must file returns every month. The GST return turnover limit is ₹5 crore in the preceding financial year. If your turnover crosses this mark, you’re required to file both GSTR-1 and GSTR-3B monthly.
How It Works
- GSTR-1: Filed by the 11th of the following month
- GSTR-3B: Filed by the 20th of the following month
Advantages
- Faster ITC for buyers: Your clients and vendors can claim ITC sooner, which makes your business more GST-compliant in their eyes.
- Real-time tracking: You have a clearer monthly picture of your tax liabilities.
- Better cash flow planning: Knowing your tax outflow every month can help you manage funds better.
Limitations
- Higher compliance effort: Filing returns 12 times a year means more time and resources.
- Increased chances of late fees: Missing a deadline even once can attract penalties.
Quarterly GST Returns
If your aggregate turnover in the previous financial year is up to ₹5 crore, you have the option to file returns quarterly under the QRMP (Quarterly Return, Monthly Payment) scheme.
This doesn’t mean you’re free of monthly obligations entirely—you still need to pay tax every month using a challan, but the detailed return is filed once every quarter.
How It Works
- GSTR-1: Filed quarterly, by the 13th of the month following the quarter.
- GSTR-3B: Filed quarterly, by the 22nd or 24th (depending on the state).
- Tax payment: Made monthly using Form PMT-06.
Advantages
- Less paperwork: Only four return filings a year
- Lower compliance cost: Less frequent filings can reduce the need for regular professional help.
- More time to reconcile books: You get a larger window to sort out invoice mismatches.
Limitations
- Delayed ITC reflection: Buyers dealing with you may have to wait longer to claim ITC.
- Monthly payment still required: While returns are quarterly, payments must be made every month.
Key Differences at a Glance
Here’s a quick comparison to help you see the difference between monthly and quarterly GST returns:
| Factor | Monthly Filing | Quarterly Filing (QRMP) |
| Tunrover eligibility | Above ₹5 crore | Up to ₹5 crore |
| GSTR-1 frequency | Monthly | Quarterly |
| GSTR-3B frequency | Monthly | Quarterly |
| Tax payment | Monthly | Monthly |
| ITC reflection | Faster | Delayed |
| Compliance load | Higher | Lower |
| Suited for | B2B-heavy, large-scale operations | Small to medium businesses |
How to Choose What’s Right for You
While turnover is the main deciding factor, choosing between monthly and quarterly returns should also be a strategic decision.
Here are a few things to consider:
- Nature of business: If you’re in a B2B space where your clients depend on timely ITC, monthly returns may be better, even if your turnover is below the limit.
- Internal capacity: Filing monthly requires more accounting support. Consider your team’s bandwidth or your reliance on consultants.
- Growth outlook: If your business is scaling quickly, planning for monthly compliance now can save effort later.
Final Thoughts
The GST system is designed to be flexible, allowing businesses to choose a filing frequency that suits their scale and operations. Understanding the GST return turnover limit is the first step. But beyond that, the decision should align with how your business functions and what your clients expect.
Whether you file monthly or quarterly, staying consistent and compliant is what matters most. As your business grows or your operations evolve, it’s always a good idea to review your filing frequency and adjust if needed.
And if you’re looking for a smarter way to manage your GST compliance, platforms like OPTOTAX can simplify the process—so you can focus more on your business and less on paperwork.
