The proposed Annual Return Quarterly Payment scheme would allow eligible businesses with turnover of up to ₹5 crore to pay GST quarterly while filing just one return a year, although key rules are still unresolved.
India’s Goods and Services Tax Council has, in principle, backed a new compliance option that could lighten the load for many small, consumer-facing firms. According to the Council’s 8 October meeting and subsequent analysis from tax specialists, the proposed Annual Return Quarterly Payment scheme, or ARQP, would let eligible businesses pay GST every quarter while filing only one return a year, rather than navigating the current rhythm of frequent filings and payments.
The proposal is aimed at businesses with turnover of up to ₹5 crore in the previous financial year that sell only to unregistered customers. Tax commentators say the logic is straightforward: firms that deal exclusively with final consumers sit at the end of the GST input tax credit chain, so their filings do not typically feed into downstream credit claims. Industry estimates cited in the commentary put this group at about 16.85 lakh taxpayers, contributing less than 1% of overall GST liability, which is one reason the Council is considering a lighter regime.
ARQP would sit somewhere between the existing QRMP framework and the composition scheme, but it would not copy either of them exactly. The current Quarterly Return Monthly Payment system already allows eligible taxpayers with turnover up to ₹5 crore to file quarterly, but it still requires monthly tax payments. By contrast, the composition scheme offers simplified compliance with quarterly payments and an annual return, but it comes with a lower turnover ceiling, concessional rates and restrictions on input tax credit. Tax publications say the proposed ARQP model would keep the normal tax structure intact while borrowing the simpler filing calendar.
For small businesses, the appeal is obvious: fewer due dates, lower compliance costs, better cash flow and fewer late-fee exposures. But advisers are warning that the scheme’s practical design still needs to be spelt out. Open questions include how the rules will treat a taxpayer that makes even a single sale to a registered buyer, how online marketplace transactions will be handled, and how the annual return will relate to existing GSTR-9 reporting. Until the detailed rules are notified, tax professionals say eligible businesses should watch the scheme closely but make no changes to compliance routines.
The Council has only agreed to the concept so far, and the proposal will need further legal and administrative work before it can take effect. The reforms are being discussed with an implementation target from 1 April 2027, according to the lead article and supporting analysis, but until then the current GST return and payment rules continue to apply. Some reports also say the Council has considered late-fee relief for returns filed within the original due month, which would add another layer of relief if it is formally adopted.
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