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 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 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. However, this GSTR 4 due date extended several times for the financial year 2019-20, as follows:
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.
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.