GST Council Proposes Annual Return Quarterly Payment (ARQP) Scheme for Small B2C Businesses — Key Details
Background and Context
The 57th GST Council Meeting, convened on 8 October 2026, has accorded in-principle approval to a new optional compliance framework designed specifically for small businesses operating in the business-to-consumer (B2C) space. Formally referred to as the Annual Return Quarterly Payment (ARQP) Scheme, this proposal seeks to fundamentally restructure the GST compliance rhythm for eligible small assessees by decoupling the return filing frequency from the tax payment cycle.
This development signals a meaningful shift in the GST Council's ongoing efforts to reduce procedural burdens on micro and small enterprises that cater exclusively to end consumers, and represents one of the more substantive compliance-simplification proposals considered in recent council meetings.
Important Caveat: The GST Council has extended only in-principle approval at this stage. The ARQP Scheme has not yet been notified and does not carry any operational force. Assessees must continue discharging their existing GST obligations until formal legislative and administrative implementation takes place through applicable rules and official notifications.
What Is the Annual Return Quarterly Payment (ARQP) Scheme?
At its core, the ARQP Scheme proposes to allow qualifying small assessees to:
- File a single annual GST return in place of the conventional periodic return-filing obligations, and
- Remit tax payments on a quarterly basis throughout the financial year, rather than making monthly or more frequent payments.
This dual structure — annual reporting combined with quarterly tax outflows — is designed to ease the administrative load on eligible businesses while ensuring that revenue collection for the government is not deferred to year-end. The mechanism draws conceptual similarity to other simplified schemes already operational under the GST framework, such as the Quarterly Return Monthly Payment (QRMP) scheme, but takes simplification a step further by extending the return interval to an annual cycle.
Key Structural Features of the Proposed Scheme
1. Annual Return Filing
Under the proposed framework, eligible assessees would be granted an option to file their GST return on an annual basis, replacing the obligation to file returns monthly or quarterly as currently required under the regular compliance mechanism. This is expected to significantly reduce the frequency of return-related activities, documentation preparation, reconciliation exercises, and associated administrative effort throughout the year.
The operative word here is "option" — the scheme is envisaged as voluntary, meaning businesses that prefer to continue under the existing return structure would not be compelled to migrate.