GST Returns

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

With the advent of the GST (Goods and Services Tax), various compliances and regulations have been introduced for the taxpayers that are to be legally followed. Procedures have been differentiated on the basis of numerous grounds. One such ground was for taxpayers who have registered under the GST Compensation Scheme. The law mandated these taxpayers to file their annual returns by filling out Form GSTR-9A, which was essentially an abridged annual return comprising comprehensive and consolidated details of CGST, SGST, and IGST payable during a particular financial year. However, this form was later scrapped and discontinued for composition taxpayers from the Financial Year 2019-2020. A new form, GSTR-4, replaced the already existing GSTR-9A. In this article, we will delve into the understanding of GSTR-4, the technicalities surrounding it, and how it differs from the old GSTR-9A Form.

What is GSTR-4?

GSTR-4 is the current requirement under the GST laws¹, which has replaced the earlier mandate of GSTR-9A. GSTR-4 was introduced to increase transparency and uniformity in the taxation system and make filing GST Returns easier for the taxpayers.

In order to understand the procedure of filing GSTR-4, we must first understand what Form GSTR-4 is. GSTR-4 represents a GST Return, which is to be filed by a taxpayer who has chosen to be governed by the composition scheme under the GST Regime. This form has made things easier for these composite taxpayers as, unlike the regular taxpayer who must provide the monthly returns thrice, those opting for a composition scheme are obligated to furnish just one annual return in the form of GSTR-4.

Composition Scheme under GST Regime

We have already established that GSTR-4 is a Form required to be filled by the taxpayers who have opted to be registered under the Composition Scheme under GST. In order to understand the functionality of Form GSTR-4, we must first have a look at what is the composition scheme.

The GST Regime has come up with a user-friendly approach by offering relief to small taxpayers by allowing them to pay GST at a predetermined rate based on their turnover. This allows these small taxpayers some relief from the intricate GST Procedures.

How do we determine whether a taxpayer is registered under the composition scheme or not?

Simply use the GST search tool, enter the GSTIN of the taxpayer and review the “Taxpayer Type” to discern whether a particular taxpayer is registered under the composition scheme or not.

Eligibility for Composition Scheme

Before getting into any further details, let us first take a look at the following who all are eligible to register under the Composition Scheme:

• The turnover must be less than Rs. 1.5 Crores. The turnover must be less than Rs. 75 Lakhs for businesses in Himachal Pradesh or North-Eastern States.
• The businesses must be registered under PAN, and to calculate the overall turnover, all businesses registered under the same PAN must be considered.
• The businesses involved in Inter-State Supplies are also eligible for registration under the Composition Scheme.

Similarly, there is a list of entities that cannot opt for registration under the Composition Scheme, such as:

• A regular or non-resident taxable person
• Service Providers
• Any Supplier other than those related to Restaurant Businesses
• Businesses using E-Commerce Operators to supply goods and services
• Manufacturers of Tobacco, Pan Masala, and Ice Cream.
• Supplier of GST Exempted Goods
• A person engaged in the supply of Inter-State Goods
• A person engaged in the supply of Non- Taxable Goods

Conditions to be fulfilled in order to register under the Composition Scheme

In order to be able to register under the Composition Scheme, the following conditions must be satisfied:

• A dealer opting to get registered under the Composition Scheme is ineligible for Input Tax Credit
• An entity registered under the Composition Scheme cannot supply goods that are not taxable under GST
• Nominal tax rates apply for transactions under the Reverse Charge Mechanism
• If the taxpayer is running different businesses under different categories, registered under the same PAN, all these businesses must be collectively registered under the composition scheme.
• The words “Composition taxable person” must be conspicuously displayed on the walls of the business premises by such taxpayers. Furthermore, every bill issued by such a taxpayer must prominently mention the words “Composition taxable person”.

Due Date for filing GSTR-4

Earlier, until 2019, the due date for filing GST returns was the 18^th of the month following the quarter’s end, but now the due date for filing GSTR-4 is the 30^th of April, subsequent to the relevant financial year. For instance, the due date for filing GSTR-4 for the financial year 2020-2021 would be 30 April 2021.

Penalty

Earlier, a late fee of Rs. 200/day was charged if the GSTR-4 was not filed within the due date, and the maximum late fee or penalty that could be levied was Rs. 5000. However, as per the latest change made, a late fee of Rs. 50/day, subject to a maximum of Rs. 2000 is to be charged.

However, there is no tax liability, and the maximum late fee to be charged is Rs. 500.

Waiver of Late Fees

Central Board of Indirect Taxes granted a waiver for late fees on GSTR-4 between 1^st May 2022 and 30^th June 2022, vide notification dated 26^th May 2022 and notification no. 7/2022

Who is required to file GSTR-4?

As already discussed, the taxpayers who have embraced the Composition scheme under the GST must adhere to the GSTR-4 filing Procedure. The businesses that have an annual turnover of less than Rs. 1.5 crores are eligible to top for the Composition scheme.

Details for Filing Form GSTR-4

The GSTR-4 Form is categorized into various tables, though it is not mandatory to fill all of them. The details of these are provided below:

Section	Details
Table 1 to Table 3- General Information	GSTIN (Goods and Services Taxpayer Identification Number) is a state-wise PAN-based 15-digit identifier. Legal Name of the Registered Person and Trade name (if any).Comprehensive annual Turnover in the preceding Financial Year is to be entered initially and then updated automatically in subsequent years.
Table 4- Inward Supplies	4A-Details of supplies received (both interstate and intrastate) from registered suppliers, excluding the reverse charge. 4B- Details of the supplies received (both interstate and intrastate) from registered suppliers, on which reverse charge applies.4C- Details of supplies received (both interstate and intrastate) from unregistered suppliers.4D- Details of all import services on which reverse charge applies.
Table 5- Overview of Self-Assessed Liability	This table automatically fills information from Form GST CMP-08, a quarterly payment submission. Form GST CMP-08 is for quarterly payments of the year. Here, the table aggregates payment details from all filed CMP-08 forms within the year, for instance, payments on outward supplies, inward supplies under reverse charge, as well as taxes and interest paid.
Table 6- Comprehensive Tax Breakdown.	Here, the taxpayer must furnish a comprehensive breakdown of outward and inward supplies subject to reverse charge, categorized by tax rates and the total taxable value. The CGST, SGST, IGST, and Cess amounts will be auto-filled.
Table 7- TDS/TCS Credit received	Any TDS/TCS credit received from a supplier or E-commerce operator will be automatically filled in the table. The taxpayer is required to enter the GSTIN of the deductor, the gross invoice value, and the TDS deducted amount.
Table 8- Tax, Interest, Late fee payable and paid	The tax amount payable is auto-filled from Table 6The tax amount already paid will be auto-filled from FORM GST CMP-08Balance tax payable calculatedInterest payable on late filing of the form should be mentioned.Late fee payable on late filing of return should be mentioned.
Table 9-  Refund claimed	In case excess tax has been paid, a refund can be claimed in this table, which should be categorized into interest, penalty, fee, and others.

Difference between GSTR-9A and GSTR-4

Ultimately, GSTR-4 was introduced to replace the GSTR-9A. GSTR-9A was also meant to be filled by the taxpayers who are registered under the composition scheme under GST, and so is the new GSTR-4. But there are certain changes that have been introduced by implementing the new GSTR-4, which are as follows:

1. Under GSTR-4, the details of the transactions from the previous fiscal year, as declared in the returns filed in April to September of the current financial year or until the filing of the annual return of the previous fiscal year, whichever comes first, needs to be provided in this return, whereas no such provision was there in GSTR-9A.
2. The details about the refunds and demands (whether claimed or rejected, etc.) should be filed under the “Other Information” Table, whereas GSTR-9A had no such requirement.
3. The information regarding input tax credit that has been either reversed or availed has to be provided under GSTR-4, whereas GSTR-9A had no such requirement.

Conclusion

GSTR-4 is an essential document within the GST framework, as it especially caters to taxpayers who have chosen to be governed by the composition scheme. It simplifies the taxation process and streamlines the compliances for these composite taxpayers. Throughout this article, we have delved into the various aspects of GSTR-4, its structure, and other key components that must be kept in mind for these taxpayers registered under the composite scheme. One of the distinctive features of GSTR-4 is its annual filing requirement as opposed to the monthly or quarterly returns that regular taxpayers file. The details filed in this Form are auto-populated into other forms, further simplifying the data entry and enhancing accuracy. The chances of mistakes and errors while computing tax liability have been reduced for these composite taxpayers. Thus, it is a reprieve for small taxpayers from the complex regulations that regular taxpayers face and caters to their diverse needs. However, if you are still caught in the web of intricate web taxation, you may take expert advice or hire professional help.

If you wish to know more about GST Returns, you may contact Enterslice.

FAQs:

1. https://services.gst.gov.in/services/gstlaw/gstlawlist