written by Khatabook | June 30, 2021

GSTR - 4: All You Need To Know

The Format, Return Filing, Eligibility and Rules applicable are discussed below to help understand GSTR-4 forms better. Composition levy taxpayers have to file a quarterly return by the 18th of the month in Form CMP-08 following the Financial Year quarter.

What is GSTR 4?

The GSTR-4 is an important GST annual return form. It needs to be filed electronically by the Composition GST taxpayers annually. GSTR 4 differs from the 3 monthly forms GSTR-1, 2A and 2B, 3A and B filed by other dealers

What is The GSTR 4 Due Date?

A GST Composition dealer has to file the GSTR 4 return form annually. The GST composition scheme due date is generally the 30th of April of the next financial year. In other words, the GSTR-4 form for the FY 2020-21 is to be filed by 30th April 2021. Till FY 2018-2019, the GSTR-4 form was filed by the 18th of the month following the end of an FY quarter. An important update for GSTR-4 returns of FY 2019-20 was that the due date for the annual returns was extended to 31st Aug 2020 and again extended to 31st Oct 2020.

Who is Eligible to File GSTR-4?

GSTR 4 means the return forms used by taxpayers who opt to file under the Composition Scheme of GST annually. 

Dealers covered under the service provider’s special composition scheme vide notification number 2/2019 of 7th Mar 2020 of CGST (Rate) can also file taxes via a GSTR-4 with effect from the FY 2019-20.

Can I revise the GSTR-4?

The GSTR 4 return filed on the GSTN Portal is final and cannot be revised. However, you can use the offline tool to prepare and check the correctness of the GSTR 4 using the Excel offline tool available on the common GST portal.

Also Read: GSTR-3B: Return Filing, Format, Eligibility & Rules

What is the Late Fee for GSTR-4?

If GSTR-4 is not filed by the due date, then a late fee of the sum of Rs. 200/day is applicable. The maximum limit of this penalty is Rs. 5,000 or 25 days after the due date.

What are the latest updates related to GST composition return Form GSTR 4?

1st May 2021

  1. The government extended the due date to file GSTR-4 for FY 2020-21 from 30th April 2021 to 31st May 2021.
  2. Interest charges for Form CMP-08 due by 18th April 2021 for January-March 2021 have been relaxed. Interest will not be charged for filing CMP - 08 on or before 8th May. For those filing between 9th May and 23rd, May interest rate was reduced to 9% but charged at 18% after that.

15th February 2021

The composition taxpayers can file annual returns in form GSTR-4 for FY 2020-21 on the GST portal. GSTR-4 must be filed by 30th April 2021.

As of the 22nd Dec 2020, the GSTR 4 due date extended and the following changes were made:

  • CBIC or The Central Board of Indirect Taxes and Customs has waived the late fee for not filing GST return for composition dealer GSTR-4 of FY 2019-2020 for registered taxpayers in the Ladakh Union Territory. 
  • A reduction or waiver of late fees has been allowed if the delayed returns are submitted between 22nd Sept 2020 and 31st Oct 2020. This applies to taxpayers who have not filed GSTR-4 forms for the FY 2017-2018 and 2018-2019.
  • The late fee relief is also applicable to taxpayers filing their returns in Forms 10 or GSTR-4 caused due to the change in the navigation of the ITC claimed report and the Comparison of liability declared. 
  • The GSTR 4 annual return for FY 2019-2020 due date has been extended to 31st October 2020.

The 32nd GST Council Meeting updates provide for benefits (awaiting governmental notification) under the Composition Traders Scheme which includes the following:

  • Annual filing of GSTR 4 format returns provided the tax is paid quarterly.
  • The government increased the annual turnover limits to Rs.1.50 Crores from 1 April 2019 under the Composition Scheme. 
  • 6 per cent GST rate applies to the Service providers under the Composition Scheme with a turnover, not more than fifty lakh/annum are eligible for the scheme with 6% rate of GST tax applicable. Uttarakhand and Jammu & Kashmir limits are 75 lakhs.
  • If 10% service is offered to customers, the dealers can also opt for the Composition scheme.

Also Read: The 38th GST Council Meeting - The Summed up Highlights

Is There any offline Tool Available to Prepare and File GSTR-4?

The Annual return Form GST4 filed by Composition Taxpayers is available on the GST Portal as an offline Excel sheet/tool. 

Excel Tool For Filing GSTR-4 Annual Return

Note that in the offline tool for GST return for composition, there are many values automatically filled in. Also, 

  • The File Return button gets enabled only when
    • No liabilities are present, and no additional cash has to be paid.
    • The declaration box is check marked.
    • The authorized signatory is selected from the signatory drop-down list.
  • If the GST CMP-08 has an excess deposited amount with a negative liability statement, the amount is automatically adjusted towards any liabilities present.

  • You can pay liabilities in the GST composition returns only by using the electronic cash ledger. If the electronic cash ledger’s available balance is insufficient to offset the liabilities, you can use the CREATE CHALLAN tab and pay into the electronic cash ledger. 
  • Table-8 auto-calculates the late fees and tax applicable. However, you should enter the interest amount. 
  • Table 4B, C, D of the relevant tax rate in the section on inward supplies details are auto-filled to Table-6 when the taxpayer uses the ‘Proceed to file’ tab. Till such time the balance displayed will be ‘0’ for the tax liability.
  • Row numbers 12 to 16 on Table-6 for outward supplies in the GSTR-4 form are filled in by the taxpayer manually. 
  • GSTR-4 Table-5 is the self-assessed summary of liabilities and is auto-filled from details of Form CMP-08 submitted quarterly.
  • GSTR-4 Table-4 with details of tax amount is also auto-calculated based on the tax rate field chosen, and Taxable Value entered. This taxpayer needs to enter the appropriate Cess applicable. 
  • The previous year’s aggregate turnover is needed, and one can use zero ‘0’ if the taxpayer was not registered, had no transactions, or had nil turnover in the previous FY.
     

  • Once all quarters of the GSTR-4 return form and the CMP-08 form have been filled, the annual returns in GSTR 4 form are automatically activated.

Important short forms in GSTR 4

  • Goods and Services Taxpayer Identification Number - GSTIN
  • Harmonized System of Nomenclature used for goods supplies - HSN 
  • Unit Quantity Code - UQC
  • Unique Identification Number - UIN
  • Place of Supply of Services and Goods - POS
  • Services Accounting Code - SAC
  • From registered business to unregistered consumer - B2C
  • From a registered dealer/business to another registered business/person - B2B

Also Read: New GST Returns: An Overview

Conclusion

In conclusion, thGSTR 4 meaning and its importance has been briefly explained through simple questions and answers. The annual return in GSTR4 allows dealers, services and businesses to file the quarterly CMP-08 quarterly forms and the annual GST-4 form instead of filling the Form-1, Form 2, 2A, 2B, Form 3, 3A, 3B every month. Further, the recent amendments to the GSTR-4 limits allow turnovers of up to 1.5 Crore to be filed under the Composition Scheme. So here's to happy filing!

FAQ

1. Should I file GSTR- 4 even if I opt out of the Composition Scheme during an FY?

Yes, one has to file the annual returns in GSTR 4 for the FY in which one opts out of the scheme, or the registration is cancelled on or before the GSTR 4 last date.

2. Who can file Nil GSTR-4 returns?

You can file a GSTR-4 Nil when you have  

  • NO outward supply.
  • NO services/goods supplied to them.
  • NO reportable liability in the period.
  • Has filed Nil returns in Form CMP-08.
  • NO late fee for GSTR 4 is due in the annual return form.

3. How to file GSTR 4?

One can file the GSTR 4 form on the GST portal. The steps to be followed are

  • Login using UIN or User ID and password
  • Head to the Services tab and click on it.
  • Choose the Returns Tab by double-clicking on it.
  • Select the Annual Returns and look for the GSTR 4 FORM.
  • Prepare and file the GSTR 4 annual return form before the GSTR-4 due date.

4. What tables are found in GSTR 4?

You can find the following tables in the GSTR-4 form.

  • Table 4A regarding the registered supplier’s inward supplies to be added, but excluding the reverse charges.
  • Table 4B used to add in the registered supplier’s inward supplies reverse charges.
  • Table 4C is used to add details of unregistered supplier’s inward supplies.
  • Table 4D is to enter in details regarding import of service: 
  • Table 5 is the CMP-08 summary and is auto-populated from the submitted quarterly CMP-08 forms.
  • Table 6 enters in the rate-wise taxes for both outward, and inward supplies reverse charges.
  • Table 7 lists the TCS/TDS credits received.

5. How to download the Form GSTR 4 summary?

The GST Portal is used to download the GSTR 4 annual return form summary. 

  1. You can log in and head to the Services Tab. 
  2. Click on the Returns Tab and choose the Annual Return Tab under it. 
  3. Next, open the PREPARE ONLINE tab under the FORM GSTR-4. 
  4. At the bottom are the options to download in Excel format or PDF format by just clicking on the relevant tab and saving it.

6. Where do I find the late fee, tax and interest amounts to be paid?

Table-8 displays the tax and late fees automatically. But, you have to enter the Interest values manually. 

7. Can I file GSTR 4 after the due date without late fee payments?

Normally returns filed after the due date attract late fees, which the business must pay before filing the returns. The government reserves the right to waive such late fees.

8. How do I set off liabilities?

The taxpayer can use the balance of the electronic cash ledger, which is the balance amount in the ledger after deducting the CMP 08 form amounts already paid. If the ledger balance is insufficient, you can create a challan using the ‘Create Challan’ tab to make the balance payment.

9. What should I do if I receive an error or processing error message?

A lot of information is auto-populated. If you get an error message during processing, you need to wait till the warning/processing is complete. If after processing, the error is displayed, you can revisit the GSTR-4 and rectify the error.

10. Can I file GSTR 4 using the offline tool?

The GST portal has an offline Excel tool to prepare the GSTR 4 annual return form. However, to complete the filing of GSTR 4 returns, one must use the online process on the portal.

11. What modes can you sign the GSTR-4 form in?

Filing the annual GSTR 4 returns is possible using EVC or DSC modes:

  • The DSC- Digital Signature Certificate is used to validate the individual’s identity. The certifying authorities generate the certificate at http://www.cca.gov.in/cca/?q=licensed_ca.html.
  • EVC- Electronic Verification Code authenticates via an SMS OTP the assessee’s identity. The SMS is sent to the mobile number registered with the GST Portal.

12. Can I preview the GSTR 4 form before filing?

Yes, you can preview the GSTR-4 form in Excel and PDF formats. To do so, you have  to click on the ‘DOWNLOAD GSTR-4 (EXCEL)’ or ‘DOWNLOAD GSTR-4 (PDF)’ tabs available on the GST portal.

13. What happens after the GSTR 4 form is successfully submitted?

Once the annual return in form GSTR 4 is successfully submitted 

  • An acknowledgement number or ARN is generated
  • The taxpayer receives acknowledgement through registered email and SMS on the registered mobile number.
  • The Electronic Cash Ledger is automatically updated.

14. How are the tax field amounts auto-populated?

The amounts are auto-filled from the taxable value field values entered. However, Cess is not calculated and needs to be filled in by the user/taxpayer.

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