GSTR-4 Composite Scheme

GSTR-4 Composite Scheme
01 June 2020

GSTR-4 Composite Scheme

The Finance Ministry has permitted the composition scheme taxpayers to file a self-assessed tax return in a one-page statement – Form GST CMP 08 of the Central Goods and Service Tax Rules, 2017. This quarterly return has to be filed after every quarter by the 18th day of the month.

This is a big sigh of relief for the 20 lakh composition dealer as now they do not have the file the complicated GSTR-4 of seven pages every quarter. GST composition scheme is for all the traders who have registered for a different set of the tax rate applicable and are mainly service providers.

GSTR-4 is a GST Return that has to be filed by a composition dealer. Unlike a normal taxpayer who needs to furnish 3 monthly returns, a dealer opting for the composition scheme is required to furnish only 1 return which is GSTR 4 once in a year by 30th of April, following a financial year.

The business entities whose annual turnover is below Rs. 1.5 Crore and who fulfills other specified criteria can register under the Composition Scheme. Unlike a normal taxpayer who needs to furnish 3 monthly returns, a dealer who opts for the composition scheme is necessary to furnish only 1 return which is GSTR-4.

Who should file the GSTR-4 form?

All the taxpayers who have registered under the composition scheme are required to file the tax return. The persons who are not eligible to file GSTR-4 are:

  1. Non-resident Taxable Persons
  2. Taxpayers who are liable to collect TCS
  3. Input Service Distributors(ISD)
  4. The Taxpayers who are liable to deduct TDS
  5. Composition Dealers
  6. Compounding taxable person
  7. Suppliers of OIDAR
Pre-requisites to file GSTR-4
  1. The taxpayer should compulsorily have a composition dealer registration under GST
  2. One should involve in Intrastate trade only.
  3. You need to keep track of all the purchases and imports made during this quarter.
  4. The aggregates turnover must be less than Rs 1.5 Crore per annum of your business.
Details to be furnished in GST CMP – 08
  1. The major details to be furnished in the statement are as follows:
  2. Outward supplies including exempt supplies
  3. Inward supplies attracting reverse charge including import of services (reverse charge mechanism)
  4. Total tax payable
  5. Interest payable

Important points to be noted:

  1. The number of outward supplies and amount taxable under reverse charge mechanism reflected shall be reported after adjusting advances, credit notes, debit notes and other adjustments due to amendments
  2. If the amount reported is a negative value, even then the value should be reflected and shall be carried forward to the next tax period for utilizing the same.
  3. A nil statement has to be filed if there is no tax liability due during the quarter
Return to be furnished annually (GSTR – 4)

The above-referred persons shall furnish GSTR 4 as a return annually on or before 30th April of the subsequent financial year.

The GST law & GSTN has initially created so many clinches and hardships to taxpayers. However, these steps by the department would really help the genuine taxpayers to find relief and ease of business.

Form GSTR-4 comprises of the tables
  1. Form GSTR-4 comprises of following tables:
  2. 4A,4B. Inward Supplies (Registered): To add details of inward supplies received from a registered supplier (with or without reverse charge)
  3. Inward supplies (Unregistered): To add details of inward supplies received from an unregistered supplier
  4. Import of Service: To add details of import of service
  5. 5A,5B. Amendment of Inward supplies (Registered): To add amendment details of inward supplies received from a registered supplier (with or without reverse charge)
  6. Amendment of Inward supplies (Unregistered): To add amendment details of inward supplies received from an unregistered supplier
  7. Amendment of Import of services: To add amendment details of import of service.
  8. Debit/Credit Notes (Registered): To add details of credit or debit notes received from the registered recipients.
  9. Debit/Credit Notes (Unregistered): To add details of credit or debit notes received from the unregistered recipients.
  10. Amendment Debit/Credit Notes (Registered): To add amendment details of credit or debit notes received from the registered recipients.
  11. Amendment Debit/Credit Notes (Unregistered): To add amendment details of credit or debit notes received from the unregistered recipients.
  12. Tax on Outward Supplies: To add details of tax on outward supplies made (Net of advance and goods returned).
  13. Amendment of Tax on Outward Supplies: To add amendment details of tax on outward supplies made (Net of advance and goods returned).
  14. Advance amount paid: To add details of advance amount paid for reverse charge supplies in the tax period.
  15. Adjustment of Advances paid: To add details of advance amount on which tax was paid in the earlier period but the invoice has been received in the current period.
  16. 8A-II. Amendment of Tax Liability: To add details of amendment of advance amount paid for reverse charge supplies in the tax period.
  17. 8B-II. Amendment of Adjustment of advances: To add amendment details of advance amount on which tax was paid in the earlier period but the invoice has been received in the current period.
  18. 10 & 11. Tax, Interest, Late fee payable and paid: Auto calculated on GST portal on clicking ‘Proceed to File’.
GSTR-4 late fees and Penalty

If GSTR-4 is not filed, the penalty of Rs 200 per day is levied. The maximum penalty limit is Rs. 5000.

Also, the taxpayer cannot file the current quarterly returns unless they have filed the previous quarter returns.