The Goods and Services Tax Department has made many amendments and improvements in GST return filing to simplify the tax filing process for businesses. One of the key components of this system is the GSTR-4 return, specifically designed for taxpayers who have opted for the Composition Scheme. In this blog, we will walk you through the essentials of GSTR-4, including what it is, who should file it, when it's due, how to revise it, and the associated late fees and penalties.
GSTR-4 is a GST return that must be filed by businesses that have chosen the composition scheme. Unlike regular taxpayers who need to submit three monthly returns, those under the Composition Scheme are only required to file one return, GSTR-4, annually.
The GSTR-4 return is an annual requirement. Taxpayers must file it by the 30th of April, following the end of the financial year. For instance, the GSTR-4 for the fiscal year 2021-22 should be filed by April 30, 2022. It's worth noting that until the financial year 2018-19, the due date was the 18th of the month following the end of each quarter.
Only those taxpayers who have opted for the composition scheme are required to file GSTR-4. The Composition Scheme is also extended to service providers, as per CGST (Rate) notification number 2/2019 dated March 7, 2020, effective from the fiscal year 2019-20.
Now, navigate to Services > Returns > 'Annual Return' option.
Select the financial year for which GSTR-4 (Annual) is being filed displayed on the 'File Annual Returns' page.
Click on the 'PREPARE ONLINE' button on the Annual Return GSTR-4 tile. Before that, carefully read the instructions given on the 'File Returns' Page.
Enter your aggregate turnover in the previous financial year and click on the 'SAVE' button. If no turnover was recorded for the last year, then enter zero. Do not leave it blank.
For example, while filing the annual return for FY 2020-2021, report the aggregate turnover in FY 2021-22.
A message gets displayed for saving the data successfully as given below:
To file a Nil GSTR-4, select the checkbox 'File Nil GSTR-4' and click on 'PROCEED TO FILE'. It takes you directly to step 7 and then step 9.
Enter the details for various tables of GSTR-4 listed and explained below. Each time, select the particular table against the ‘Select tables to add/view details’ drop-down list to enter the details and click on the ‘BACK’ button.
Details that rae required for various tables of GSTR -4 are listed and explained below:
Inward supplies from registered suppliers (other than reverse charge).
GSTIN-wise details of purchases from GST registered suppliers.
Add the GSTIN, that auto-populates legal name and place of supply, and click on the Add (+) button for every entry.
Under ‘Item details’, enter the taxable value and choose the GST rate mandatorily.
Under ‘Item details’, enter the taxable value and choose the GST rate mandatorily.
Inward supplies from a registered supplier (reverse charge)
1. Enter GSTIN-wise details of purchases from GST-registered suppliers subject to reverse charge.
2. Add GSTIN, taxable value, and GST rate for each entry.
Under ‘Item details’, enter the taxable value and choose the GST rate mandatorily.
Click on the Add (+) button against the entry to add more rows of items or click on ‘SAVE’ to continue with the next GSTIN.
‘Processed records’ displays all the entries successfully added.
Inward supplies from unregistered suppliers
PAN-wise details of purchases made from any GST unregistered suppliers.
PAN is not mandatory so you can enter the trade/legal name of such supplier. If a reverse charge applies, select the checkbox and select the ‘Supply Type’ as ‘Intra-State’ or ‘Inter-State’. Click on the Add (+) button.
Under ‘Item details’, enter the taxable value and choose the GST rate mandatorily. Click on the Add (+) button against the entry to add more rows of items or click on ‘SAVE’ to continue with the next PAN.
‘Processed records’ displays all the entries successfully added.
Import of Service
Consists of details of services imported on which IGST has been paid.
Click on the Add (+) button to add information on every item.
Enter the taxable value and choose the GST rate mandatorily. Click on the Add (+) button against the entry to add more rows of items or click on ‘SAVE’ to continue with the next table.
‘Processed records’ displays all the entries successfully added.
Summary of CMP-08
View the auto-drafted summary of CMP-08 statements filed for all four quarters of the financial year. It cannot be edited.
Tax rate wise outward supplies and inward supplies attract reverse charge
User must enter the value of outward supplies/sales between rows 12 to 16 of a prefixed tax rate-wise table against the respective GST rate applicable to the composition taxpayer of 0, 1, 2, 5, or 6%. Such value must be net of advances, credit-debit notes adjustments due to amendments, etc.
The value of inward supplies attracting reverse charge (auto-populated from tables 4A, 4B and 4C) between rows 1-11 does not get displayed at this stage.
Click on ‘SAVE’ to proceed with the next table.
TDS/TCS credit received
View the auto-drafted GSTIN-wise details of TDS/TCS credit received during the financial year. It cannot be edited.
After adding all the records, click on ‘BACK’ to navigate to the dashboard of GSTR-4 (Annual Return).
Common notes:
1. Negative values are allowed in tables 4A, 4B, 4C, 4D and 6.
2. You can edit/delete entries anytime before filing by clicking on ‘Edit/Delete’ icons under the Action column.
3. Use the ‘Search’ field to find a list of added records
4. ‘Records Per Page’ drop-down list allows you to fix a particular number of records to be displayed on the page.
5. Use the ‘Download CSV’ link to download the added details in CSV format.
Click on the 'PROCEED TO FILE' button to preview the saved return.
The status of the return changes to 'Ready to file as on (date)'.
Click either on the ‘DOWNLOAD GSTR-4 SUMMARY (PDF)’ or ‘DOWNLOAD GSTR-4 (EXCEL)’ button to save a copy of the prepared return for your review and records. PDF/Excel file is displayed as follows:
Click on ‘PROCEED TO FILE’ again to preview the form online and click on the ‘CONTINUE’ button.
Make any tax, interest, or late fee payments displayed on table '8. Tax, Interest, late fee payable and paid' before continuing if any. Payment can be made in two ways:
1. Click on the 'CREATE CHALLAN' button if cash in the electronic cash ledger is insufficient for full or part payment. Select the desired mode of payment such as NEFT or RTGS/Over the Counter/Net Banking and generate the challan after payment.
2. If the electronic cash ledger has sufficient balance for full payment, then the cash will be adjusted from the ledger for the tax payment automatically.
Click either on the ‘DOWNLOAD GSTR-4 SUMMARY (PDF)’ or ‘DOWNLOAD GSTR-4 (EXCEL)’ button for reviewing the updated GSTR-4 return and proceed to the next step.
At the bottom of the tax payment page, select the declaration checkbox and the authorised signatory. Select the ‘FILE GSTR-4’ button.
Confirm by clicking ‘YES’ on a warning message and click on either of the ‘FILE WITH DSC’ or ‘FILE WITH EVC’ button displayed on the ‘File return/statement’ page.
Following is the outcome of your actions:
1. The status of return changes to ‘Filed’.
2. Application Reference Number (ARN) gets generated and displayed on the screen.
3. A confirmation message is sent via SMS and email registered with the GST portal.
It's important to note that GSTR-4 cannot be revised after filing it on the GSTN Portal. Thus, accuracy and thoroughness are vital during the initial filing.
As of the latest update, the late fee for failing to file GSTR-4 is Rs. 50 per day, up to a maximum of Rs. 2,000. In cases where the tax liability is nil, the maximum late fee is capped at Rs. 500. Prior to this update, the late fee was higher, amounting to Rs. 200 per day, with a maximum limit of Rs. 5,000.
In conclusion, GSTR-4 plays a crucial role in the GST framework for Composition Scheme taxpayers, simplifying their return filing process. Understanding the format, due date, eligibility criteria, and implications of late fees and penalties is essential for smooth compliance with GST regulations. As businesses evolve, it's important to stay updated on any future changes to these rules to ensure you meet your obligations as a Composition Scheme taxpayer.
Filing of GSTR-1 before GSTR-3B
