What Is GSTR-4?

What is GSTR 4 Annual Return?

GSTR-4 is an annual return form applicable to businesses registered under the GST composition scheme. 

Unlike regular GST taxpayers who file monthly or quarterly returns, composition scheme taxpayers are required to file GSTR-4 only once a year. The GSTR 4 Form includes various details of a business such as outward supplies and inward supplies, tax paid, aggregate turnover, and more for a particular financial year. 

A single filing a year makes it easy for small business owners to manage and file their returns. They pay a fixed tax on their turnover with no provision to claim input tax credit (ITC).
 

Eligibility Criteria For GST’s Composition Scheme

Businesses that have opted for the GST composition scheme are required to file GSTR-4. The GST rate ranges from 1% to 6%. Also, these taxpayers cannot charge GST on their sales nor claim ITC on their purchases.

You need to understand the below to file the GSTR 4 form correctly without errors. 

●    Aggregate Turnover: The total turnover of the previous financial year.
●    Inward Supplies: Details of purchases from registered suppliers, including those attracting reverse charges.
●    Outward Supplies: The sales turnover and the GST payable at the composition rate applicable to the business.
●    Amendments: Any adjustments or corrections to previously filed returns.

This was a glance, in the coming section, we will cover each detail of the GSTR 4 form. 

Due Dates for GSTR 4

GSTR-4 is an annual return, and it must be filed once for each financial year by taxpayers registered under the GST Composition Scheme. The standard due date for filing GSTR-4 is 30th April of the following financial year.

For example, for a financial year ending on 31st March, the corresponding GSTR-4 return is generally due by 30th April of the next year. This timeline allows composition taxpayers to consolidate their annual turnover, tax paid, and related details before submission.

It is important to note a few practical points:

• The due date may be extended by the government through notifications in certain years.
• Late filing can attract late fees and interest, calculated from the original due date.
• Even if there is no tax liability, filing GSTR-4 within the due date helps maintain a clean compliance record.

Keeping track of the GSTR-4 due date is particularly important for composition dealers, as missed deadlines can lead to unnecessary penalties and follow-up notices from tax authorities.

What Is The Format Of GSTR 4?

The GSTR 4 form is divided into 9 tables. 

Tables 1-3: Basic Information

This table is auto-populated and includes fundamental information about the taxpayer:

• The taxpayer’s GSTIN
• Name
• Aggregate turnover from the previous financial year
• Application Reference Number (ARN)
• ARN date These fields are auto-populated.

Table 4: Inward Supplies

Table 4 is broken down into four parts:

• 4A: Records supplies received from registered suppliers that are not subject to reverse charge, including both intrastate and interstate transactions.
• 4B: Contains information on supplies received from registered suppliers that are subject to reverse charge.
• 4C: Details supplies from unregistered suppliers, covering both intrastate and interstate transactions.
• 4D: Focuses on taxable import services subject to reverse charge.

Table 5: Summary of Liability

Table 5 is the summary of the taxpayer's liability based on self-assessment as per Form GST CMP-08. It is filled automatically. This part includes:

• Taxes on inward supplies attracting reverse charge, outward supplies, interest paid, and the total tax amount.

Table 6: Outward Supplies

Table 6 requires details of outward supplies and inward supplies attracting reverse charge, including:

• The tax rate 
• Amounts of IGST, CGST, SGST, and Cess.

Table 7: TDS/TCS Details

This table requires details on TDS/TCS received from suppliers or e-commerce operators, including:

• The GSTIN of the deductor/operator
• Gross invoice value
• TDS amount.

Table 8: Tax, Interest, and Late Fee

Table 8 outlines the payable and paid amounts for tax, interest, and late fees. It includes:

• The payable tax amount (auto-filled from Table 6)
• Tax amount paid (as per Form CMP-08)
• Balance tax payable
• Interest payable and paid for late filing, and the late fee payable and paid for delayed GST payment.

Table 9: Refund Claims

Table 9 allows taxpayers to claim refunds on excess taxes paid, breaking down the refund amount into categories like tax, interest, penalty, fee, and others.
 

Who Should File GSTR-4 Annual Return Under GST?

GSTR-4 is an annual return that must be filed by taxpayers who have opted for the GST Composition Scheme during the relevant financial year. It serves as a consolidated summary of outward supplies, tax paid, and other key details for the year.

Typically, the following taxpayers are required to file GSTR-4:

• Composition scheme dealers registered under GST.
• Businesses that paid tax at fixed composition rates instead of regular GST rates.
• Taxpayers who were under the composition scheme for any part of the financial year, even if they later shifted to the regular scheme.

GSTR-4 is not applicable to regular GST taxpayers, non-resident taxable persons, or input service distributors. Filing this return helps the tax authorities reconcile annual turnover and tax payments for composition dealers, while keeping the compliance process relatively simple and centralised.

How To File GSTR 4 Online?

The GSTR 4 filing process is easy and can be done on the GST portal. Let’s see how to file the GSTR 4 Form. 

Step 1: Login

Taxpayers need to log in to the GST portal and navigate to Services > Returns > ‘Annual Return’ option. The ‘Annual Return’ button on the dashboard can also be used.

Step 2: Select Financial Year

Upon accessing the ‘File Annual Returns’ page, select the relevant financial year for which GSTR-4 is being filed.

Step 3: Prepare Online

Click on the ‘PREPARE ONLINE’ button on the Annual Return GSTR-4 tile and carefully read the instructions provided.

Step 4: Enter Aggregate Turnover

Enter the aggregate turnover of the previous financial year. If there was no turnover, enter zero. Do not leave this field blank.

Step 5: File Nil GSTR-4 (If Applicable)

If filing a Nil return, select the checkbox ‘File Nil GSTR-4’ and proceed directly to the final steps.

Step 6: Enter Details for Various Tables

Enter the required details under various tables such as inward supplies from registered suppliers, outward supplies, and any other applicable sections.

Step 7: Preview and File

Before submitting, preview the saved return by clicking on ‘PROCEED TO FILE’. Review the summary in PDF or Excel format to ensure accuracy. Once satisfied, proceed to file the return.

Step 8: Make Payment

If any tax, interest, or late fee is due, it must be paid before filing. Payments can be made using the electronic cash ledger.

Step 9: Submit with DSC/EVC

Complete the filing process by submitting the return using a Digital Signature Certificate (DSC) or EVC (Electronic Verification Code).

Things To Be Consider While Filing GSTR 4

You need to consider the following for Filing GSTR 4.

Eligibility Verification: Verify the eligibility criteria for the composition scheme,
Accuracy of Turnover Details: Provide accurate and complete details of the aggregate turnover for the financial year.
Timely Reconciliation: Reconcile inward and outward supplies data to ensure that the details captured in GSTR-4 align with the business transactions and tax invoice.
Correct Classification of GST Rates: Categorise the outward supplies under the appropriate GST rates to ensure accurate reporting of sales and purchases, net of advances, credit/debit notes, and amendments.
Documentation and Record-Keeping: Maintain proper documentation of invoices, transaction records, and other relevant documents to support the details furnished in GSTR-4.
 

How To Revise GSTR-4?

GSTR-4, once filed, cannot be revised in the traditional sense. The GST framework does not allow taxpayers to edit or refile an already submitted GSTR-4 return. However, this does not mean errors are locked in permanently.

If you discover a mistake after filing, the usual approach is to rectify it in a subsequent return or disclosure, as permitted under GST rules. In practice, this works as follows:

• Identify the error clearly: This could relate to turnover details, tax liability, or other reported figures.
• Adjust in the next return: Any short reporting or excess reporting is typically corrected in the next applicable return period.
• Pay additional tax, if required: If the correction results in extra tax liability, it should be paid along with applicable interest.
• Maintain proper records: Keep internal workings and explanations for the correction, in case of queries from tax authorities.

Because revision is not allowed, accuracy at the time of filing becomes especially important for GSTR-4, particularly for taxpayers under the composition scheme.

Fee And Penalty For Late GSTR 4 Online Filing

If a taxpayer fails to file GSTR-4 by the due date, a late fee is charged. Previously, the late fee for failing to file GSTR-4 on time was Rs. 200 per day, with a maximum cap of Rs. 5,000. 

However, these fees have been reduced to ease the compliance burden on small businesses and make the GST system more taxpayer-friendly.

As per the latest regulations, the late fee is Rs. 50 per day, which includes Rs. 25 under CGST (Central Goods and Services Tax) and Rs. 25 under SGST (State Goods and Services Tax), up to a maximum of Rs. 2,000.

For taxpayers with nil tax liability, the late fee is reduced to Rs. 20 per day, which includes Rs. 10 each under CGST and SGST, with a maximum cap of Rs. 500. 

In addition to late fees, taxpayers are also liable to pay interest on any outstanding tax liability. The interest rate is typically 18% per annum and is calculated from the day after the due date until the date of payment. This interest is applicable on the amount of tax that remains unpaid beyond the due date.

Conclusion

GSTR 4 annual return is important for small business owners under the composite scheme. The due date falls on the last day of the financial year. It is crucial to file the GSTR 4 Form by the due date to avoid penalties and interest charges.