Easy Guide to GSTR 4 with Step by Step Online Return Filing UNDER GST COMPOSITION SCHEME

 

Easy Guide to GSTR 4 with Step by Step Online Return Filing

 

What is GSTR 4? UNDER

The GSTR- 4 form is an annual return form for those taxpayers who have opted  GST Composition scheme in the new indirect tax regime. Under the GST composition scheme, taxpayers will be required to file only one return in every financial year.

Also, the taxpayers will have to file CMP-08 for the payment in every quarter of the year. The due date for each CMP-08 filing is 18th of every succeeding quarter. .

Latest Updates in Form GSTR 4

26th July 2021

“CBIC circulated advisory for negative liability issues while filing GSTR 4 form. Also, the government has shared the reason with the solution via update.”

11th June 2021

“Forthcoming advanced functionalities for taxpayers on the GST portal related to GSTR 4, GSTR 1, composition taxpayers, etc.”

28th May 2021

“The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others”

“Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021” 

1st May 2021

“Seeks to extend the due date for filing FORM GSTR-4 for the financial year 2020-21 to 31.05.2021.” 

22nd December 2020

“The Central Board of Indirect Taxes and Customs (CBIC) waived the late fee on delay in furnishing of FORM GSTR-4 for Financial Year 2019-20 for the registered person in the Union Territory of Ladakh”. 

“Seeks to grant waiver / reduction in late fee for not furnishing FORM GSTR-4 for 2017-18 and 2018-19, subject to the condition that the returns are filled between 22.09.2020 to 31.10.2020.” 

“Relief in late fees to Taxpayers filing Form GSTR-4 or 10 and change in navigation of Comparison of liability declared and ITC claimed report”. 

The GSTR 4 annual return due date has revised once again till 31st October 2020 for FY 2019-20 | 

Let us know how to use offline tools for preparing Form GSTR 4 Annual Return by Composition Taxpayers. An offline excel tool has been provided by the GST portal for all the composition taxpayers in order to help them in getting their GSTR 4 annual return form. 

Major Points to File GSTR-4 (Annual Return)

File button is enabled only if:

No additional cash is required to be paid for liabilities

You have clicked on the declaration checkbox

You have selected authorised signatory details from the drop-down list

The excess amount deposited through GST CMP-08, available in negative liability statement will also get adjusted towards liabilities if any

If the available balance in electronic cash ledger is less than the amount required to offset the liabilities, you can directly create challan by clicking on the CREATE CHALLAN button

Tax and late fees are auto-drafted in Table-8 but interest is user input. Liabilities can be discharged only through electronic cash ledger.

The details of inward supplies (from table 4B, 4C, and 4D for each tax rate) will be auto-drafted in Table-6 only after the Taxpayer has clicked on the ‘Proceed to file’ button. Before that, the balance will be displayed as ‘0’ (zero)

Once you entered outward supply details in Table-6 and click the “Proceed to file” button, liability on the RCM basis is auto-populated from details entered in Table 4B,4C, and 4D. Thereafter, Table-6 shows your total tax liability

The details of outward supplies in Table-6 (Row 12-16) of GSTR-4 have to be entered manually by the taxpayer.

Summary of self-assessed liability is auto-populated in Table-5 of the GSTR-4 Annual Return on basis of filed Form CMP-08 & is non-editable.

The tax amounts in Table-4 of GSTR-4 are auto-calculated on the basis of the values entered in Taxable Value and tax rate fields. However, the tax amount is editable. The CESS is to be entered by the taxpayer.

The aggregate turnover is required to be entered of the last year and if in case the business did nil transaction or turnover in the last FY or not registered it can put ‘0’ zero

The annual GSTR 4 return filing will get activated once the taxpayer has finished filing of all the quarters of CMP-08 of the given financial year

Annual Return Form GSTR-4 Available on the GST Portal

The government has decided to let the taxpayers, assesses, and businesses file GSTR 4 on an annual basis. This has been done due to the demand of the community. The form is also available on the portal which has further relaxed the assess and taxpayers in finding and filing the form as per their convivence.

32nd Council GST Meeting Updates for Composition Traders

GSTR 4 return is required to be filed annually instead of quarterly along with tax paid to be the quarterly basis.

GST Council increased the annual turnover limit to 1.50 Crores, effectively from 1 April 2019

6 per cent GST rate applicable to the Composition scheme for service providers and turnover up to 50 lakh per annum

Note: Above amendments shall be applied after the official government notification.

Not all businesses will be eligible to register under the GST composition scheme, only those business entities whom annual turnover up to Rs 1.5 crores and fulfil other criteria’s can be entitled to register under the Composition Scheme. Also, note that the special category states excluding Jammu & Kashmir and Uttarakhand have composition scheme limit of up to 75 lakhs and the two states mentioned with 1 crore limit must be registered under the GST composition scheme limit. Also, there is a special scheme for the taxpayer whose 10% turnover is considered as a service to the consumer can also register under the GST composition scheme.

 

The information details in GSTR 4 form (CMP-08) should be filed in 18th of the next succeeding month following the quarter of the relevant tax period. The GSTN Portal is also available with GSTR 4 offline tool based on excel worksheets. The offline tool on the excel sheet is offered for simple GST returns filing for the GSTR 4 returns.  

GST CMP 08 Payment Form

Salient Features of GSTR 4 Return Form

GSTR 4 Returns will file on an annual basis for compounding Taxable persons. The last date for filing the GSTR- 4 (CMP-08) payment form is 18th of the month following the quarter. GSTR 4 (CMP-08) returns can be filed on 18th April, 18th July, 18th October, and 18th January and so forth

GSTR  – 4 Form is filed by all the taxpayers who registered under the composition scheme

Business entities registered under the composition scheme will be required to pay taxes at fixed rates quarterly without availing input tax credit facility

The taxpayer will be required to show the total value of supplies made in a specific period and tax paid at the composition rate

The taxpayer will be required to insert invoice- level purchase details for the purchases from normal taxpayers, which will be automatically updated GSTR 4A Form from supply invoice uploaded by the opposite party in GSTR 1

Who Should File GSTR 4 Form

All the composite registered taxpayers are required to file the tax return.

Deadlines for GSTR 4 & GST CMP-08 Payment Form

GST CMP 08 Due Date for FY 2021-22

Period (Quarterly)	Due Dates
1st Quarter – April to June 2021	18th July 2021
2nd Quarter – July to September 2021	18th October 2021
3rd Quarter – October to December 2021	18th January 2022
4th Quarter – January to March 2022	18th April 2022

Note:

“Relaxations in filing Form CMP-08 for Composition Taxpayers: For the Quarter of Jan-March, 2021, instead of 18th April 2021, Composition Taxpayers can now file their quarterly return in Form CMP-08, without interest up to 3rd May 2021, with 9% reduced interest between 4th May to 18th May 2021, and with 18% interest from 19th May 2021 onwards.”

“Provided that the said persons shall furnish a statement, containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, for the quarter ending 31st March, 2020, till the 7th day of July, 2020”. 

GSTR 4 Annual Filing Due Dates for FY 2020-21

Period	Revised Due Date
Annual Return	31st July 2021

Note:

“Form GSTR-4 Annual Return by Composition Taxpayers, for the FY 2019-20, is now available for filing.”

“Annual return GSTR 4 due date extended to 31st Aug 2020 for the F/Y 2019-20 vide notification no. 59/ 2020“.

“Provided that the said persons shall furnish the return in FORM GSTR-4 of the Central Goods and Services Tax Rules, 2017, for the financial year ending 31st March 2020, till the 15th day of July 2020”. 

GST Council clearly stated in acts that if a person has not paid the taxes before the due dates, then the GST Council has strict rules and regulations to accommodate it with 18 % interest rate per year. The interest rate is applied to the number of days the taxpayer missed out. To look into the act clearly you can read the information from point 50 of chapter 10 here: https://cbec-gst.gov.in/CGST-bill-e.html

If we take the illustration of it, a person missed out the due date of yesterday, then the taxpayer has to pay 1000*18/100*1/365 = Rs. 0.49 for one day and the calculation varies on payable tax and the total missed out days.

In case if a taxpayer does not file his/her return within the due dates mentioned above, he shall have to pay a late fee of Rs. 50/day i.e. Rs. 25 per day in each CGST and SGST (in case of any tax liability) and Rs. 20/day i.e. Rs. 10/- day in each CGST and SGST (in case of Nil tax liability) subject to a maximum of Rs. 5000/-, from the due date to the date when the returns are actually filed.

 

Let us understand the step- by- step guide filing procedure of GSTR 4

GSTR 4 return form is divided into 13 sections but it is not necessary to fill all these sections. Some of the details of sections in GSTR 4 form are given below:-

Part 1 to Part 3 – General Information

GSTIN:- Every Taxpayer gets a state-wise PAN-based 15 digit Goods and Services Taxpayer Identification Number (GSTIN) from the Government. It must be noted that the identification of the taxpayer will be automatically filled at the time of filing return in the coming future

Legal   Name of the Registered Person and Trade name (if any):- The taxpayer name will automatically fill time of filing the returns at GSTN portal

Annual Turnover in the preceding Financial Year:- A taxpayer will be required to fill all the information only for the first time of filing and after then it will be automatically updated in the succeeding years

Part 4 – Inward supplies including supplies on which tax is to be paid on reverse charge

Inward supplies received from a registered supplier (other than supplies attracting reverse charge), the information will be auto-populated from the provided by the supplier in GSTR-1 and GSTR-5. Inward supplies received from a registered supplier (attracting reverse charge- this information will be automatically filled from the information provided by the supplier in GSTR-1, inward supplies received from an unregistered supplier and Import of service. It must be noted that all inward supplies to composition will auto-filled here

Note: FinMin tweeted that the composition taxpayers can leave purchase invoice details in table number 4 part 4A.

Part 5 – Amendments to details of inward supplies furnished in returns for earlier tax periods in Table 4 [including debit notes/credit notes and their subsequent amendments]

It will include amendment information mentioned in earlier tax periods and also original amended of debit or credit note received, rate- wise. Place of supply to be mentioned in case if the same is different from the location of the recipient. While providing the information of original debit /credit note, the details of the invoice must be provided in starting three columns, whereas, providing the revision of the details of original debit /credit note shall be provided in the first three columns of this Table

Part 6 – Tax on outward supplies made (Net of advance and goods returned)

Under this section, you will provide the details of a tax rate, total turnover, out of turnover reported and the composition tax amount including both central tax & State/UT tax.

Part 7 – Amendments to Outward Supply details furnished in returns for earlier tax periods in Table No. 6

Under this section, you will be able to rectify the incorrect details you provided in Table 6 in previous returns, without turnover reported details additionally added.

Note:

In the GST council meeting, the authorities decided to revise the GSTR 4 filing form with some inclusion of terms in clause 6 & 7. The revised columns have been added to the final form and mentioned in the red text.

Part 8 – Consolidated Statement of Advances paid/Advance adjusted on account of receipt of supply.

Under this, details of the advance paid relating to reverse charge supplies and if you paid taxes on them, adjustments against invoices issued to be mentioned in Table 8

Part 9 – TDS Credit received

TDS (Tax Deduct at Source will be auto-filled in Table 9

Part 10 – Tax payable and paid

Under this section, you will be to provide the details of Integrated Tax, Central Tax, State/UT Tax, and cess tax amount payable as well tax amount paid

Part 11 – Interest, Late Fee payable and paid

This section for those taxpayers who have not paid the taxes timely

Part 12 – Refund claimed from Electronic cash ledger

If in case the tax liability of the composition dealer is below than the TDS deducted, he can get a refund of balancing amount. The amount which is available for the refund will auto-filled under this section

Part 13 – Debit entries in cash ledger for tax /interest payment [to be populated after payment of tax and submissions of return]

 

GST CMP 08 is a quarterly return form which must be filed by the composition taxpayers after the end of each quarter. The due date for filing GST CMP 08 return online is the 18th of the month after a particular quarter. GSTR 4 is an annual return form, for which the due date is 30th April after a particular financial year.

Important Terms Frequently Used in GSTR 4

GSTIN – Goods and Services Taxpayer Identification Number

UIN – Unique Identification Number

UQC – Unit Quantity Code

HSN – Harmonised System of Nomenclature

SAC – Services Accounting Code

POS – Place of Supply of Goods and Services

B2B – From one registered person to another registered person

B2C – From registered person to unregistered person

HSN: Harmonised System of Nomenclature (HSN code is filled in case of the supply of goods)

A taxpayer will be required to provide the aggregate turnover of the immediately preceding financial year and the first quarter of the current financial year.

The taxpayer will be required to furnish all the information only in the first year and it will be automatically updated in the succeeding years.