Goods and Service Tax

A Complete Understanding of GSTR-4 Return Filing

calendar22 Mar, 2023
timeReading Time: 4 Minutes
A Complete Understanding of GSTR-4 Return Filing

GSTR-4 Return is an important return that is to be filed by every taxpayers, those who are selecting annual Composite Scheme. Earlier the return was filed in every quarter till the financial year 2018-2019, but now it has been replaced by CMP-08. This article discusses about the applications and filing of GSTR-4 under the GST Law[1].

What Does GSTR-4 Constitute?

GSTR-4 Return (GSTR-4) is a quarterly return that must be filed by registered taxpayers under the composition scheme. The composition scheme is a simple and easy-to-comply tax scheme designed for small taxpayers with a turnover of up to Rs. 1.5 crores.

GSTR-4 contains the summary of all the outward supplies made during the quarter and the tax liability arising from such supplies. It also includes details of any inward supplies received during the quarter, taxes paid on such inward supplies, and the input tax credit (ITC) availed on them.

GSTR-4 must be filed by the 18th day of the month succeeding the quarter for which the return is being filed. For example, the GSTR-4 return for the quarter ending 30th June must be filed by 18th July.

What Are Essential Requirements To File For A GSTR-4 Return?

GSTR-4 is a GST return that is required to be filed by registered taxpayers who have opted for the Composition Scheme. As per the 49th GST Council meeting updates the

The following are the prerequisites to file GSTR-4 on the GST portal:

  • Valid GSTIN – To file GSTR-4 on the GST portal, you need to have a valid GSTIN.
  • Composition Scheme Opt-in – You should have opted for the Composition Scheme under GST.
  • Quarterly Filing Frequency – You should be a quarterly filer under the Composition Scheme.
  • Validity of Composition Scheme – Your Composition Scheme should be valid on the date of filing GSTR-4.
  • Payment of Tax Liability – You should have paid your tax liability for the previous quarter before filing GSTR-4.
  • Details of Inward and Outward Supplies – You should have accurate details of inward and outward supplies made during the previous quarter.
  • No B2B Transactions – If you have made any B2B (business to business) transactions, you cannot file GSTR-4.
  • No Exports or Supplies through E-commerce Operator – If you have made any exports or supplies through an e-commerce operator, you cannot file GSTR-4.

Once you have fulfilled these prerequisites, you can log in to the GST portal and file GSTR-4 online.

When Is GSTR-4 Return To Be Filed?

The GSTR-4 is to be filed annually in every financial year by 30th of April.

Persons Who Are Eligible To File GSTR-4?

GSTR-4 is a GST return that must be filed by taxpayers who have opted for the Composition Scheme under GST. The Composition Scheme is a scheme for small taxpayers with a turnover of up to Rs. 1.5 crores (in most states) who can opt for a simpler tax scheme with a lower tax rate and reduced compliance burden. Only taxpayers who have opted for the Composition Scheme are eligible to file GSTR-4. These taxpayers must file the GSTR-4 return on a quarterly basis.

Procedure to File for GSTR-4 Return Filing: (A Step-By-Step Guide)

GSTR-4 is a quarterly return that needs to be filed by taxpayers who have opted for the Composition Scheme. Here is a step-by-step guide to filing GSTR-4:

  • You have to first log in to the GST portal using your credentials.
  • Once you are logged in, select the ‘Services’ tab from the main menu, and then click on the ‘Returns’ tab.
  • From the drop-down menu, select the ‘Returns Dashboard’ option.
  • On the Returns Dashboard, select the appropriate financial year and the quarter for which you want to file the GSTR-4 return.
  • Click on the ‘Prepare Online’ button to begin the process of filing the GSTR-4 return.
  • In the GSTR-4 return form, provide the following details:
    • Details of outward supplies made during the quarter
    • Details of inward supplies received during the quarter
    • Details of any amendments made to the previous quarter’s return
    • Tax payable and paid
    • Late fees to be paid, if any
    • After filling in all the required details, click on the ‘Save’ button to save the return.
  • Once you have saved the return, click on the ‘Preview’ button to review the details entered.
  • If you find any errors or omissions, you can make the necessary changes and save the return again.
  • Once you are satisfied with the return, click on the ‘Proceed to File’ button.
  • The system will validate the return and display any errors or warnings, if applicable. If there are any errors, you need to correct them before proceeding.
  • After the return is validated, click on the ‘File GSTR-4’ button.
  • The system will prompt you to confirm the filing of the return. Click on the concerned button to confirm.
  • After the return is successfully filed, you will receive a confirmation message. You can download and keep a copy of the filed return for your records.
    That concludes the step-by-step guide for filing GSTR-4.

What Are The Penalties Charged For Not Filing On GSTR-4 Return?

The late fee for not filing GSTR-4 on time is Rs. 200 per day of delay (Rs. 100 as SGST and Rs. 100 as CGST). The maximum late fee is Rs. 5,000 (Rs. 2,500 as SGST and Rs. 2,500 as CGST). There is no late fee for NIL returns.

In addition to the late fee, a penalty for non-filing or late filing of GSTR-4 may also be imposed. The penalty is 10% of the tax amount due, subject to a minimum of Rs. 1000. Therefore, it is important for taxpayers to file their GSTR-4 returns on time to avoid late fees and penalties.

Conclusion

It’s important to note that GSTR-4 is only applicable to taxpayers who have opted for the Composition Scheme. If a taxpayer crosses the turnover threshold of Rs. 1.5 crores, they must switch to the regular scheme and file regular returns.

Also Read:
GST Portal Rolled Out New Offline Tool For Filing GSTR 4 Annual Return Form

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