GSTR 4 Return Filing Due Date Filing Process & Late Fees

As we know, all registered GST taxpayers and business owners in India are required to file certain GST returns on a monthly, quarterly, or annual basis. One such return form is GSTR-4, which taxpayers under the Composition Scheme need to file.

Let’s understand what GSTR-4 is in detail:

Table of Contents

What is GSTR-4?

GSTR-4 is a yearly GST return form that small businesses (registered under the Composition Scheme) need to file once every financial year.

Overview of Composition Scheme

There are many small businesses in India that have lower turnover, but they still need to go through heavy tax compliance related to Tax, GST, and other formalities.

To make compliance easier, the government introduced the Composition Scheme in 2017 to help eligible small taxpayers pay GST at a fixed and lower tax rate on their total turnover instead of following the regular GST system.

Let’s understand the key players in this:

  • Small taxpayers who have opted for the GST Composition Scheme
  • Business owners registered as composition dealers
  • Persons who were under the Composition Scheme during the financial year

Advantages and Compliance Requirements under the Composition Scheme

This is a question many taxpayers have: If they opt for the Composition Scheme, what are the compliance requirements, and what major advantages will they get?

If you opt for the Composition Scheme, here are the benefits you get:

  • You pay GST at a small, fixed percentage of your total sales.
  • You cannot charge GST separately on invoices.
  • You cannot claim Input Tax Credit (ITC).
  • You must file CMP-08 quarterly.
  • You must file GSTR-4 annually

In short, under this scheme, businesses need to file two major forms: Form CMP-08, which is filed quarterly (by the 18th of the month following the quarter) to pay taxes, and Form GSTR-4, which is filed annually (by April 30th of the following financial year).

In this blog, we are mainly going to cover the GSTR-4 form, from its applicability to how you can file this form.

What information do you need to file in GSTR-4?

In this form, you simply report a summary of your business activities for the whole year, such as:

  • Total sales you made during the year
  • Total purchases from suppliers
  • Any services you imported from outside India
  • Any transactions where GST must be paid under Reverse Charge (RCM)

In simple terms, GSTR-4 is an annual summary where composition taxpayers inform the GST department about their total sales, purchases, and tax details for the year.

Who is eligible to file GSTR-4?

Applicability to file GSTR-4 is completely based on the Composition Scheme. Taxpayers who have registered under the Composition Scheme are required to file GSTR-4.

Let’s first understand who is eligible for the Composition Scheme, and then who needs to file GSTR-4.

  1. Small Businesses with Limited Yearly Sales: If your total sales in a year are up to ₹1.5 crore, you can choose this scheme other than in Special Category States. For some Special Category States, the limit is ₹75 lakh.
    Special Category States include Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand.
  2. Service Providers: A separate scheme exists for service providers with an annual turnover of up to ₹50 lakh in the preceding financial year.
  3.  Small Traders and Shopkeepers: If you buy and sell goods (like grocery shops, clothing shops, hardware stores), you can opt for it.
  4. Small Manufacturers: If you manufacture goods on a small scale, you are eligible.
  5. Small Restaurants (not serving alcohol): Small food businesses that do not serve alcohol can choose this scheme.

What is the due date for filing GSTR-4?

GSTR-4 must be filed once every year by taxpayers under the Composition Scheme.

Annual Filing Timeline: It must be filed on or before June 30th following the end of the financial year.
(Example: For FY 2024-25, it must be filed by June 30th, 2025.)

How to file GSTR-4?

Here is the step-by-step process for filing GSTR-4 in India:

Step 1: Login
Log in to the GST portal → Go to Returns → Select GSTR-4 → Choose Financial Year.

Step 2: Check Details
Verify auto-filled details like turnover and Tax paid (from CMP-08).

Step 3: Pay Tax (if any)
If Tax is pending, pay it and adjust it from your cash ledger.

Step 4: File Return
Submit using DSC or EVC.
After filing, you will receive an ARN confirmation

Details to Be Reported in GSTR-4

Here are the details. You need to file this information in detail and prepare it as a prerequisite checklist.

  • Summary of Outward Supplies
  • Inward Supplies & Reverse Charge
  • Tax Liability & Payment Details
  • Amendments, If Any

Consequences of Late Filing

If you do not file GSTR-4 on time, you will have to pay late fees, your GST compliance record may be affected, or you may face difficulty in future GST filings or registrations.

Late Fees & Penalty Provisions

  • Late fee is charged per day of delay (₹25 CGST + ₹25 SGST)
  • It is subject to a maximum limit (₹1,000 CGST + ₹1,000 SGST)
  • If there is a nil return (no tax liability) per day (₹10 CGST + ₹10 SGST)
  • Interest @ 18% p.a may also be payable if Tax is not paid on time.

Quarterly CMP-08 vs Annual GSTR-4

Many taxpayers under the Composition Scheme sometimes get confused between these two forms. Since these are the two main forms they need to file, let’s understand the key differences to make it easier.

Basis of Difference CMP-08 GSTR-4
Filing Frequency Quarterly Annually
Purpose To declare turnover and pay tax To file an annual summary return
Nature Tax payment form Annual reporting form
Details Included Summary of self-assessed Tax payable Total turnover, inward supplies, Tax paid, liability details
Due Date 18th of the month following each quarter June 30th, following the financial year
Main Objective Payment of Tax every quarter Final annual reporting of the composition taxpayer

Common Mistakes to Avoid while Filing GSTR-4

There are many filing mistakes businesses make while filing their taxes. Let’s understand these mistakes so that taxpayers can protect themselves in the future:

Incorrect Tax Calculation

As a taxpayer under the Composition Scheme, you must ensure that Tax is calculated at the correct applicable rate (1%, 5%, 6%, etc., depending on your business type). Wrong calculations can lead to short payments and interest on the liability.

Missing Reverse Charge Liability

You should not forget to report and pay Tax under Reverse Charge (RCM), if applicable. Ignoring RCM can result in additional tax demand and penalties.

Late Filing Issues

You must file GSTR-4 before June 30th of the next financial year.
Delay can result in:

  • ₹50 per day late fee (₹20 for nil return)
  • Maximum ₹2,000
  • 18% interest on unpaid Tax

Non-Reconciliation with Books

Before filing, you should reconcile:

  • Turnover as per the books
  • Tax paid through CMP-08
  • Tax liability in GSTR-4

Mismatch can lead to notices from the GST department

Practical Compliance Checklist for Composition Dealers

Here are some practical tips that a taxpayer under the Composition Scheme must follow.

✔ Maintain Proper Purchase Records: Keep all purchase bills and expense records safely. This helps in checking turnover and reverse charge liability.

✔ Monitor Turnover Limits: Regularly check your yearly sales. If your turnover crosses ₹1.5 crore (₹75 lakh for special category states), you must shift to the regular GST scheme.

✔ File CMP-08 Quarterly: Every quarter, declare your turnover and pay Tax through CMP-08 before the due date.

✔ File GSTR-4 Annually on Time: File GSTR-4 once every year before June 30th of the next financial year.

Professional Tips for Filing GSTR-4

Accuracy today prevents notices tomorrow.

With professional tax consultants at Mercurius, we often find that businesses face various issues with their GST filing. Here are some useful tips to help you file your GST returns quickly and without delays:

  • Reconcile quarterly CMP-08 payments with annual turnover before filing GSTR-4.
  • Verify Reverse Charge (RCM) liability to avoid short payment of Tax.
  • Apply the correct composition tax rate based on your business category.
  • Ensure turnover is within the prescribed composition limit.
  • Review inward supply details carefully for accuracy.
  • Compute late fees and 18% interest correctly, if applicable.
  • Conduct a final compliance review before submission, as GSTR-4 cannot be revised.
  • Plan filing well before June 30th to avoid last-minute errors

How can Mercurius help?

At Mercurius, we help businesses successfully complete their GST filings in India while ensuring full compliance with Indian tax laws.

We provide end-to-end support, from registering your business under GST at the initial stage to assisting you in filing all the required GST returns. We act as your dedicated Tax and compliance partner to ensure that all your tax filings are completed accurately and on time in India.

We are a CA firm based in Delhi, India, with over 17 years of experience in tax filing and compliance. We assist entrepreneurs and businesses with effective tax planning and help them save taxes legally while staying fully compliant with regulations.

To know more details regarding this, you can contact us.