Goods and Services Tax (GST) has been one of the biggest tax reforms in India, unifying multiple indirect taxes under a single umbrella. The introduction of the GST has not only simplified the tax structure but has also ensured greater transparency and accountability in the tax collection process. To make it more convenient for small taxpayers, the GST Council has introduced the Composition Scheme, that allows them to pay a lower rate of tax based on their turnover.
Composition Scheme is designed to provide a simple and easy-to-comply tax structure for small taxpayers whose annual turnover is up to Rs. 1.5 crore. Under this scheme, the taxpayers are required to pay a fixed percentage of their turnover as tax instead of the regular GST tax rate. The Composition Scheme is available to taxpayers engaged in the supply of goods and services, except for certain categories of businesses.
One of the key compliance requirements for taxpayers registered under the Composition Scheme is the filing of GSTR-4. In this blog, we will understand the basics of GSTR-4 and its filing requirements.
What is GSTR-4?
GSTR-4 is a quarterly return that needs to be filed by taxpayers registered under the Composition Scheme. It is a summary of all the sales made during the quarter and the tax liability that needs to be paid. The details that need to be furnished in GSTR-4 include:
- Basic details of the taxpayer
- Summary of all sales made during the quarter
- Tax liability and payment details
Filing of GSTR-4
GSTR-4 needs to be filed on a quarterly basis, i.e., by the 18th of the month following the end of the quarter. For example, GSTR-4 for the quarter ending March 31st needs to be filed by April 18th. The filing of GSTR-4 can be done online through the GST portal.
Late filing of GSTR-4 attracts a late fee of Rs. 200 per day, subject to a maximum of Rs. 5,000. It is important to note that the GSTR-4 cannot be revised once it is filed. Hence, it is crucial to ensure the accuracy of the details furnished in the return.
Key points to keep in mind while filing GSTR-4:
- Ensure that all the details are furnished accurately.
- Make sure that all the sales made during the quarter are included in the return.
- Pay the tax liability on time to avoid penalties.
- Keep a record of all the transactions and invoices issued during the quarter.
Who needs to file GSTR-4?
Only taxpayers registered under the Composition Scheme are required to file GSTR-4. The Composition Scheme is an optional scheme for small taxpayers with an annual turnover of up to Rs 1.5 crore. Businesses that deal with interstate supplies, e-commerce operators, manufacturers of ice cream, pan masala, and tobacco products, and non-resident taxable persons are not eligible for the Composition Scheme and, hence, are not required to file GSTR-4.
What are the details to be furnished in GSTR-4?
The following are the details that need to be furnished in GSTR-4:
- Basic details of the taxpayer, such as the name, address, and GSTIN
- Details of inward supplies received from registered and unregistered suppliers
- Summary of all sales made during the quarter, including the taxable and exempted supplies
- Details of tax liability and payment, including the amount of tax paid, tax payable, and input tax credit availed
How to file GSTR-4?
GSTR-4 can be filed online through the GST portal. Here are the steps to file GSTR-4:
- Log in to the GST portal using your GSTIN and password.
- Navigate to the ‘Services’ tab and click on ‘Returns’.
- Select the financial year and the relevant quarter for which you want to file GSTR-4.
- Click on the ‘Prepare Online’ button to start filing the return.
- Furnish all the required details in the return, including the sales and tax liability details.
- Once you have furnished all the details, click on the ‘Preview’ button to verify the details entered.
- If all the details are accurate, click on the ‘Submit’ button to file the return.
- Pay the tax liability and complete the filing process.
What are the consequences of non-filing or late filing of GSTR-4?
Non-filing or late filing of GSTR-4 attracts a penalty of Rs. 200 per day, subject to a maximum of Rs. 5,000. The penalty is applicable even if there is no tax liability for the quarter. It is important to file the return on time to avoid any penalties.
Can GSTR-4 be revised?
No, GSTR-4 cannot be revised once it is filed. Hence, it is important to ensure the accuracy of the details furnished in the return.
In conclusion
GSTR-4 is a quarterly return that needs to be filed by taxpayers registered under the Composition Scheme. It is important to ensure the accuracy of the details furnished in the return and file it on time to avoid any penalties. By complying with the GSTR-4 requirements, taxpayers can contribute to the growth of the Indian economy and avoid any legal consequences.
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Frequently Asked Questions (FAQs)
Q: Who is required to file GSTR-4?
A: GSTR-4 needs to be filed by taxpayers registered under the Composition Scheme. The Composition Scheme is an optional scheme for small taxpayers with an annual turnover of up to Rs 1.5 crore.
Q: What is the due date for filing GSTR-4?
A: GSTR-4 needs to be filed on a quarterly basis, i.e., by the 18th of the month following the end of the quarter.
Q: What are the details to be furnished in GSTR-4?
A: The details that need to be furnished in GSTR-4 include basic details of the taxpayer, details of inward supplies received, a summary of all sales made during the quarter, and details of tax liability and payment.
Q: Can GSTR-4 be revised?
A: No, GSTR-4 cannot be revised once it is filed. Hence, it is important to ensure the accuracy of the details furnished in the return.
Q: What happens if GSTR-4 is not filed or filed late?
A: Non-filing or late filing of GSTR-4 attracts a penalty of Rs. 200 per day, subject to a maximum of Rs. 5,000.
Q: Can I file GSTR-4 offline?
A: No, GSTR-4 can only be filed online through the GST portal.
Q: Do I need to provide invoice-level details in GSTR-4?
A: No, taxpayers registered under the Composition Scheme are not required to provide invoice-level details in GSTR-4. They only need to provide a summary of all sales made during the quarter.
Q: Can I claim an input tax credit (ITC) under the Composition Scheme?
A: No, taxpayers registered under the Composition Scheme are not eligible to claim ITC on their purchases. They are required to pay a fixed percentage of their turnover as tax instead of the regular GST tax rate.
Q: What happens if I exceed the threshold turnover of Rs. 1.5 crore?
A: If a taxpayer registered under the Composition Scheme exceeds the threshold turnover of Rs. 1.5 crore, they are required to switch to the regular GST scheme and file GSTR-1, GSTR-2, and GSTR-3 returns. They are also required to pay the regular GST tax rate on their sales.
