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GSTR-4: Return Filing, Format, Eligibility & Rules

GSTR-4 is a return that must be filed by the taxpayers opting for Composition Scheme on an annual basis. Until FY 2018-19, the return was filed every quarter which got replaced by CMP-08. A composition dealer is not like a normal taxpayer that pays 3 monthly returns, a composition dealer furnishes only one return once a year under a composition scheme using GSTR-4 form. The form GSTR-4 is to be filed on the 30th of April of every year following a financial year time period.

Who should file it?

A taxpayer opting for the Composition Scheme is required to file GSTR-4. It also covers the special composition scheme notified for the service providers vide the CGST (Rate) notification number 2/2019 dated 7th March 2020 with effect from FY 2019-20.

When is GSTR-4 due?

GSTR 4 has to be filed on an annual basis.

The due date for filing GSTR 4 is 30th of April following the relevant financial year. For example, the GSTR-4 for FY 2020-21 is due by 30th April 2021*. Until the FY 2018-19, the due date was 18th of the month after the end of the quarter.

*Note: The time limit to file GSTR-4 annual returns for the FY 2019-20 was further extended to 31st October 2020 from 31st August 2020.

How to revise it?

Once a composition dealer pressed on the option of “PREPARE ONLINE.” Then there is nothing he can do to revise or rectify the GSTR-4 form anyhow.

Even if the document and form are submitted offline, the GSTR-4 form will not be able to be rectified.

Therefore, GSTR 4 cannot be amended or altered after filing on the GSTN Portal.

GSTR-4

Late Fees and Penalty

A late fee of Rs. 200 per day is levied if the GSTR-4 is not filed within the due date. The maximum late fee that can be charged cannot exceed Rs. 5,000.

Details to be mentioned in form GSTR-4

Section 1GSTIN – The composite taxpayer will get his GSTIN number automatically at the time of filing the return.

Section 2Name of the Composite Taxpayer – The tax-paying person has to enter his or her name (legal) and the name of his or her trade. At the time of return filing, these names will automatically be generated.

Section 3Correct Turnover Details – It’s important to write every detail appropriately as the GSTR-4 form is unrevisable. The tax-paying person has to enter the exact turnover as the information of the previous financial year always gets auto-populated every year. Also, the date of the ARN and ARN will automatically generate. As you can see in the image below:

Table 3

Section 4: Inward Supplies With Reverse Charges (to be paid with tax) –

  1. When you get supplies from a registered supplier (apart from reverse charges) : An individual needs to offer all the details about the supplies received from the registered suppliers when the reverse charges are not applicable.
  2. When you get supplies from a registered supplier (drawing reverse charges): One has to offer all the necessary details related to supplies one received from the registered supplier including both inter-state and intra-state. Also, a reverse charge is applicable.
  3. When the Supplier is unregistered: A tax-paying person has to provide all the data about the supplies he or she received from any unregistered supplier both inter or intrastate.
  4. Importable Services: A tax-paying person has to provide information about all the imported services for which one has to pay the taxes due to the reverse charge mechanism applicability.

Here is the format of section 4.

section 4

Section 5The summary of Form GST CMP-08 as a self-responsible liability – All the information in this section will automatically get uploaded directly from GST CMP-08. The GST CMP-08 is used for making the payment on a quarterly basis across the year. This section will also interconnect your payment details from the CMP-08 form filed during the year (it will include outside supplies, inside supplies, reverse charges, and tax & interest paid).

You can clearly see the format of section 5.

section 5

Section 6Information that displays outside and inner supplies along with reverse charge during that year – A tax-paying person has to provide all the information about the outside supplies and inside supplies in the financial year. These supplies attract reverse charges based on the tax rate long with overall taxable value. And the taxes such as – CGST, SGST, IGST, and Cess will get automatically uploaded.

Here check the format of section 6 to understand it better.

section 6

Section 7Credit received with TDS and TCS – All the TCS/TDS credit received from the e-commerce operator will be automatically generated in this section. Here the taxpayer will also mention the GSTIN of the deductor, gross invoice, and TDS deduction.

The format and content of section 7.

section 7

Section 8Tax, interest, late fee payable and paid –

  1. PayableTax amount
  2. Already Paid Tax amount
  3. Payable Balance tax
  4. Paid Interests and Payable Interest
  5. Payable Late fee payable and paid ones

Here is the section 8 format.

section 8

Section 9Claiming the refund from E-cash ledger – If somehow, someone paid the tax in excess then he or she can claim the refund. Further, the refund amount will be bifurcated into tax, interest, penalty, fee, and other divisions.

The last section format.

Section 9

Verification –

In the end, the composite tax-paying person has to validate that all the information written or automatically generated in the form GSTR-4 is correct and true. Now, finally, they have to sign the form.

Steps to file GSTR-4.

  1. The first step is to log in to the online GST portal and navigate to the Services > Returns > ‘Annual Return’ option. OR You can also hit on the ‘Annual Return’ option present on the dashboard.
  2. Now, select the applicable financial year for which you are filing annual GSTR-4 as displayed on the page under the name ‘File Annual Returns’.
  3. Press on the ‘PREPARE ONLINE’ option. But before that, make sure that you have read the instructions carefully as given on the ‘File Returns’ Page.
  4. You have to enter the exact turnover in the previous financial year as it was and then hit the save button. And, in case there is no recorded turnover for the preceding year then you should enter zero. But make sure not to leave it blank.
  5. If you want to file a Nil GSTR-4, then you have to choose the checkbox ‘File Nil GSTR-4’ and tick on the ‘PROCEED TO FILE’. This directly takes you to steps 7 and 9.
  6. You have to enter the details for various tables of GSTR-4 as explained and listed below. And, every time you select a table against the ‘Select tables to add/view details’ drop-down list. You have to enter details and press the back button.
  7. Hit on the ‘PROCEED TO FILE’ option to see the preview of the saved return.
    You will notice that the status of the return further changes to ‘Ready to file as on (date). Now, click either on the ‘DOWNLOAD GSTR-4 SUMMARY (PDF)’ or ‘DOWNLOAD GSTR-4 (EXCEL)’ button. This is how you will save a copy of the prepared return. You can see how the excel or pdf data will be displayed on your screen.
  8. If there is any penalty for the late filing of the return then it will be displayed in table 8. The balance will also be displayed in the cash ledger as shown in the image below. However, the payment can be done in two ways:
    Press on the ‘CREATE CHALLAN’ button if you have insufficient or partial payment in the electronic cash ledger. You have to select the mode of payment as per your wish and create the challan once the payment is done.
    And if an e-cash ledger has enough balance, then the amount will be further adjusted from the records for the payment of tax that too automatically. Also, no amount is represented on the screen in the ‘Additional cash required’ column.
    Press on the ‘DOWNLOAD GSTR-4 SUMMARY (PDF)’ or ‘DOWNLOAD GSTR-4 (EXCEL).’
    Check the review by pressing on review option as updated GSTR-4 return and continue to the following step

  1. File your annual GSTR-4 return using the DSC or EVC.

At the end of the page, you have to select the declaration checkbox and the authorized signatory. Press the ‘FILE GSTR-4’ button.
Click on ‘YES’ on an alert message and press either on ‘FILE WITH DSC’ or ‘FILE WITH EVC’ as displayed.

Suggestion

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