GSTN Advisory for QRMP Taxpayers on Refund Filing

The Goods and Services Tax Network (GSTN) has shared a new advisory for taxpayers using the QRMP (Quarterly Return Monthly Payment) scheme. This update is important for anyone who wants to file a GST refund or is facing issues while doing so.

In May 2025, the GST portal introduced a new system check. This check helps ensure that taxpayers follow all rules before applying for a refund. It was designed to improve compliance and make refund processing smoother. However, after the update, some QRMP taxpayers started facing problems when filing their refund applications.

What is the QRMP Scheme?

The QRMP scheme is for small businesses with a yearly turnover of up to ₹5 crore. It allows them to:

• File GSTR-3B returns every quarter
• Pay tax every month
• Upload sales invoices in the first two months using the Invoice Furnishing Facility (IFF)

What Does the Law Say About Refunds?

Refund rules are explained in Circular No. 125/44/2019-GST, issued on 18th November 2019.

According to Paragraph 6 of that circular, a taxpayer must file all required GST returns before submitting a refund application. If any return is pending, the refund request can be blocked or rejected.

New Validation on GST Portal (May 2025)

To follow this rule more strictly, the GST portal added a new system check in May 2025. This check looks at:

• Whether the taxpayer has filed all GSTR-3B returns for the relevant period.
• Whether the invoice data from IFF or GSTR-1 matches with what’s in the GSTR-3B.

The idea is to make sure refunds are only given after full compliance.

Problems Faced by QRMP Taxpayers

While the new rule helps in compliance, it also causes technical issues, especially for QRMP users:

• The portal did not recognise invoices uploaded through IFF for the first two months (M1 and M2) of the quarter.
• Some refund applications were blocked, even though taxpayers had filed all returns properly.

Key Takeaways for Taxpayers

• Make sure all GSTR-3B returns are filed before applying for a refund.
• Don’t rely only on IFF data; it must match with GSTR-3B.
• If you face any issues, check if the relevant returns have been submitted for the period of refund.
• Stay updated with GST advisories or consult your tax professional if needed.

However, the introduction of this validation led to unintended technical complications, particularly for taxpayers under the QRMP scheme.

Problems Faced by QRMP Taxpayers While Filing Refunds

Many small businesses using the QRMP scheme have faced problems when trying to file their refund applications—even after filing all the required returns. Two main issues have been reported:

1. Invoices Uploaded in IFF Not Accepted

• Taxpayers who uploaded their invoices using the Invoice Furnishing Facility (IFF) for the first two months of the quarter (called M1 and M2) found that the GST system did not recognize these invoices.
• The reason? IFF data (uploaded monthly) wasn’t matching properly with the quarterly GSTR-3B, which doesn’t show individual monthly data.
• Because of this mismatch, the portal wrongly assumed that some returns were missing or incomplete, and blocked the refund application.

2. GST Portal Asking for Returns That Aren’t Due Yet

• In some cases, taxpayers had already filed GSTR-1 for the previous quarter and then applied for a refund in the new quarter.
• But the system wrongly asked them to also file returns for M1 and M2 of the current quarter, even though those were not yet due.
• This caused confusion, as the portal seemed to expect monthly return filing even though QRMP taxpayers are required to file quarterly.

These technical issues on the portal have caused many genuine refund applications to be delayed or rejected unfairly.

Clarification Issued by GSTN

To clear up the confusion faced by taxpayers, the GSTN has issued some important clarifications:

Refunds Are Based on GSTR-3B Only

• Refund applications are checked against the GSTR-3B return, which shows the actual tax paid.
• If you’ve uploaded invoices using IFF for the first two months of a quarter (M1 and M2), you must also file the GSTR-3B for that quarter before claiming a refund.
• Without the GSTR-3B, the system will not consider your refund request valid.

IFF Data Is Not Enough by Itself

• IFF is just a tool to share invoice details early, mainly to help your buyers get input tax credit (ITC) in time.
• But it’s not a replacement for GSTR-3B, which is the main return used to assess your tax liability.
• So, simply uploading invoices in IFF isn’t enough. You must also submit your quarterly GSTR-3B to be eligible for a refund.

The Problem with Quarter Transitions Is Being Fixed

• GSTN admitted that, in some cases, the system wrongly asked for returns for M1 and M2 of the current quarter, even when the refund applied to the previous quarter.
• Their tech team is now working on fixing this error so that refunds are checked against the correct period in the future.

Key Takeaways for QRMP Taxpayers Filing Refunds

If you’re registered under the QRMP scheme and want to avoid issues while applying for GST refunds, keep these points in mind:

1. File GSTR-3B on Time

• Ensure you have filed GSTR-3B returns for all quarters up to the refund period.
• Refunds will not be accepted if any return is pending.

2. Don’t Apply Too Early

• Avoid submitting a refund application immediately after uploading invoices in IFF.
• Only apply after the corresponding GSTR-3B has been filed.

3. Check That Your Data Matches

• Verify that the invoice details in GSTR-1 or IFF match those reported in GSTR-3B.
• This is especially important for export-related or zero-rated refund claims.

4. Maintain Proper Documents

• Keep all supporting documents like invoices, shipping bills, BRC/FIRC, and payment records.
• Make sure they align with your GSTR-3B return.

5. Stay Informed and Get Help If Needed

• Regularly check for GSTN updates or advisories.
• If problems arise, reach out to the GST Helpdesk for assistance.

Legal and Procedural Points to Remember

Getting a refund under GST is not automatic. You can only get a refund if you meet all the rules set by the law. Here are the basic conditions:

• You must have paid all your tax dues for the period you’re claiming the refund.
• All your GST returns should be filed up to date.
• The refund application must be submitted within the time limit, usually within 2 years from the relevant date.
• All invoices and documents must be correct and match your filed returns.

If you’re using the QRMP scheme, things can be a bit more complex. That’s because invoice uploads through IFF (for the first two months of the quarter) are separate from the GSTR-3B filing (which is done quarterly). You can’t assume that uploading invoices through IFF alone is enough to qualify for a refund—the GSTR-3B must also reflect those details.

Different Types of Refunds – What to Keep in Mind

1. Export Refunds (Without Payment of Tax)

• If you’re exporting goods or services without paying IGST, you need to submit an LUT (Letter of Undertaking) and claim input tax credit (ITC).
• Make sure all relevant invoices, including those uploaded in IFF, are included in the same quarter’s GSTR-3B before applying for a refund.

2. Refund Due to Inverted Duty Structure

• If the tax rate on your inputs is higher than the tax on your outputs, you can claim a refund on the difference.
• This also requires accurate GSTR-3B filings showing both input and output tax details.

3. Refund of Excess Cash in Electronic Cash Ledger

• This is usually the easiest type of refund.
• Even then, your returns should be up to date to avoid rejection or delays.

What Taxpayers Can Expect

The GSTN team is working to make the portal smoother and more accurate for taxpayers. Based on the problems faced by QRMP users, a few improvements are likely in the near future:

• Stronger connection between IFF invoices and the related GSTR-3B data.
• Smarter validation checks that can clearly tell the difference between current and previous quarter refunds.
• Clearer, real-time messages to help users fix issues when applying for refunds.

Advice for Taxpayers and Consultants

Until these updates are rolled out, tax consultants and professionals should guide their clients to stay compliant and avoid common mistakes—especially when using the QRMP scheme.

The recent advisory from GSTN is not just a technical note—it’s a clear signal that full compliance is essential. The QRMP scheme is helpful in reducing the number of returns, but it also requires a solid understanding of how IFF uploads, GSTR-3B filings, and refund claims work together.

Final Words: Be Timely, Accurate, and Careful

Don’t rush into filing a refund just after uploading invoices in IFF. Wait until your quarterly GSTR-3B is filed and all your records are in sync. Filing early or with mismatched data can lead to delays, rejection, or even extra scrutiny from GST officers.

To avoid these issues:

• Stay updated with the latest GST advisories,
• File all returns on time,
• Match your data across returns, and
• Keep your documents ready.

By doing this, you can make sure your refund process goes smoothly and without unnecessary problems.