The Government of India extends two types of GST registration to taxpayers in the country – Regular GST registration and Composition Scheme registration. The Composition Scheme allows dealers to file a GST return on an annual basis through Form GSTR 4.
GSTR 4 is an annual return form containing the details of inward and outward supplies of a composition dealer. It was introduced through the Third Amendment, 2019, to GST Rules 2017. Until the financial year 2018-19, the law required taxpayers to file a GSTR 4 return every quarter. However, Form GST CMP-08 replaced this quarterly return form, and GSTR 4 annual return was set in motion.
By opting for Composition Scheme, a taxpayer can file a GSTR 4 once a year, unlike regular taxpayers who furnish returns on a monthly or quarterly basis.
The revised annual Form GSTR 4 consists of nine sections. A rundown of their contents is discussed below:
Tables 1-3 contain the basic information about a taxpayer, such as the name of the individual, his/her GSTIN, aggregate turnover in the preceding financial year, ARN and date of ARN. These particulars are auto-populated at the time of filing a return.
Taxpayers are required to provide the details of their inward supplies in this section. It is divided into four subsections as mentioned below –
This table auto-populates the summary of one’s liability by way of self-assessment as per Form GST CMP-08. It consolidates the CMP-08 forms’ payment details filed in a given financial year, including details of payment made on inward supplies that attract a reverse charge, outward supplies, interest paid, and amount of tax.
Under this table, composition dealers are required to furnish details of their outward supplies as well as inward supplies wherein a reverse charge is applicable. Alongside these details, table 6 also calls for the details of tax, such as the rate and amount of tax. However, amounts of IGST, CGST, SGST and Cess gets auto-populated.
Here, taxpayers need to enter the GSTIN of the deductor/e-commerce operator, their gross invoice value, and the amount of TDS deducted. Any TDS/TCS received from a supplier or e-commerce operator gets auto-filled in this table.
It contains information on tax, interest and late fee, both payable and paid. It contains the following particulars:
This table allows taxpayers to claim a refund on taxes, in the circumstances wherein excess taxes are paid. This refund amount gets divided into the following:
Composition dealers file a GSTR 4 on an annual basis. The due date of filing it is April 30th of the financial year, succeeding the year for which taxpayers are filing the GSTR 4 annual return.
One can easily file a GSTR 4 online on the GST portal by following these steps:
After the completion of the above procedure, the status of return changes to ‘Filed’. Additionally, a taxpayer receives an Application Reference Number (ARN) and a confirmation message via SMS or email registered with their GST portal.
The composition Scheme allows taxpayers to pay GST at a fixed rate of turnover, thereby eliminating the tedious GST formalities. The table below elaborates on the tax rates applicable for composition dealers:
|Business Type||SGST (%)||CGST (%)||Total (%)|
|Manufacturers/ Traders of goods||0.5||0.5||1.0|
|Restaurants (not serving alcohol)||2.5||2.5||5.0|
|Other service providers||3.0||3.0||6.0|
A taxpayer can opt for Composition Scheme and file a GSTR 4 if his/her turnover is less than Rs. 1.5 crores. For North-Eastern states and Himachal Pradesh, this limit is lowered to Rs. 75 lakh. The Government of India, by way of this scheme, simplifies the process to file returns for taxpayers.