A Guide to GSTR-4

What is GSTR-4? 

A Composition Dealer is required to submit GSTR-4, a GST Return Form, quarterly. The only information that the composition dealer must include in Form GSTR-4 is the total amount of supplies made during the return period and the total amount of tax paid at the compounding rate, along with information on how the tax was paid in the return.

Who should file GSTR-4?

GSTR-4 strictly adheres to the GST Composition Scheme, a simple and easy GST scheme. This system allows small taxpayers to avoid cumbersome GST formalities and pay GST simply at a set turnover rate. Any taxpayer with an annual turnover of less than Rs. 1.5 Crore may choose this scheme.

All composition taxpayers are required to file Form GSTR-4. This comprises:

1. Taxpayers who chose the composition scheme before the transition to the GST or their original GST registration and have never opted out since;

2. Taxpayers who chose to participate in the composition scheme prior to the commencement of any fiscal year since the implementation of the GST regime;

3. Taxpayers first chose composition but then decided against it at any time during the year.

What does the GSTR-4 form entail?

The GSTR-4 is composed of the following components: 

• The GSTIN 

• Name of the taxpayer

• Details of the total turnover of the previous financial year will need to be filled in once by you. 

• Details of inward supplies, including those eligible for a reverse charge, are also part of GSTR components.

Inward supply details include the following:

• Inward supplies from unregistered persons

• Inward supplies from registered suppliers (attracting reverse charge)

• Inward supplies from registered suppliers (other than reverse charge)

• Import of services (subject to reverse charge)

• Any revisions to inward supply details, including credit and debit notes, stated in returns for a previous tax period.

• Taxes on outward supplies made, including advance and goods returned, during the tax period you're filing returns for.

• Any revisions to outward supplies details mentioned in previous GSTR 4 returns for earlier tax periods.

• Any advances you have paid for reverse charge supplies are listed in this section. Also, any taxes paid on advances that you paid earlier but received the invoice for only now should be mentioned here.

• Any received TDS credit. This table will require details such as the GSTIN of the deductor, the TDS amount, and the gross invoice value.

• Total tax liability and tax payment made with segregation according to heads of cess, CGST, SGST, IGST, and UTGST.

• Any payable or paid interest and late fees (including details of the same).

• Refund claims can be made in this section for past excess taxes you paid. You can claim a refund under the taxation, interest, and penalty sections. fees, and others.

• All payments made in cash, including tax, interest, and late fees, must be listed here.

Prerequisites for filing GSTR-4

The composition taxpayer must have met the following prerequisites before drafting and filing GSTR-4:

1. A minimum of one day within the applicable financial year was spent signing up and choosing the composition scheme.

2. Filed all pertinent form CMP-08 statements for each fiscal year's four quarters.

3. Note the total turnover that was recorded for the previous fiscal year.

How to file GSTR-4?

The following are the steps for filing an annual GSTR-4 online:

Step 1: Log in to the GST portal and select Services. Under the Services, select the Returns option and under the drop-down provided, select Annual Returns. 

Step 2: From the list of applicable financial years on the "File Annual Returns" page, choose the one for which GSTR-4 (Annual) is filed.

Step 3: On the Annual Return GSTR-4 tile, click the "PREPARE ONLINE" button. Read the directions on the "File Returns" Page thoroughly before proceeding.

Step 4: Enter the total revenue for the prior fiscal year and press the "SAVE" button. Enter zero if no turnover was reported for the previous year. 

Step 5: Check the box labelled "File Nil GSTR-4" and press the "PROCEED TO FILE" button to submit a Nil GSTR-4. You’ll be taken to Step 7 and Step 9 immediately.

Step 6: Enter the information for the various GSTR-4 tables listed and described below. To input the details, choose the specific table from the drop-down box labelled "Select tables to add/view details" and click the "BACK" button.

• Table 4A: Inward Supplies from Registered Suppliers (Except for Reverse Charge)-

Details of purchases from GST-registered vendors, broken down by GSTIN.

For each entry, enter the GSTIN and click the Add (+) button to have the legal name and place of supply automatically filled in.

Enter the taxable value and choose the GST rate under "Item details" as required.

To add more rows of goods, click the Add (+) button next to the entry. Alternatively, you can click "SAVE" to move on to the next GSTIN.

All successfully added entries are shown under "Processed records."

• Table 4B: Inward supplies from a registered supplier (reverse charge)-

Information about purchases from GST-registered suppliers is subject to reverse charge, broken down by GSTIN.

By default, the GSTIN fills in the legal name and place of supply. Add the GSTIN by clicking the Add (+) button.

Enter the taxable value and choose the GST rate under "Item details" as required.

To add more rows of goods, click the Add (+) button next to the entry. Alternatively, you can click "SAVE" to move on to the next GSTIN.

All successfully added entries are shown under "Processed records."

• Table 4C: Incoming goods from unregistered suppliers

PAN-wise details of purchases made from any GST unregistered suppliers.

PAN is not required. Thus you are free to specify the supplier's trade or legal name. Select the checkbox and "Supply Type" as "Intra-State" or "Inter-State" if a reverse charge is applicable. Select "Add (+)" from the menu.

Enter the taxable value and choose the GST rate under "Item details" as required. To add more rows of things, click the Add (+) button next to the entry or click "SAVE" to move on to the next PAN.

All successfully added entries are shown under "Processed records."

• Table 4D: Import of Service

It consists of details of services imported on which IGST has been paid.

The Add (+) button must be clicked to add details for each item.

Enter the taxable amount and make your GST rate selection automatically. To add more rows of items, click the Add (+) button next to the entry or click "SAVE" to move on to the following table.

All successfully added entries are shown under "Processed records."

• Table 5: CMP-08 Summary View the automatically generated summary of the CMP-08 statements submitted for the entire financial year's four quarters. It is uneditable.

• Table 6: Tax rate-wise outward supplies and inward supplies attracting reverse charge

Between rows 12 and 16 of a prefixed tax rate-wise table, the user must input the value of outward purchases/sales in relation to the relevant GST rate that applies to the composition taxpayer, which may be 0, 1, 2, 5, or 6 per cent. It must be net of any advances, credit-debit notes, changes made due to modifications, etc.

The value of inbound supplies attracting reverse charge (auto-populated from tables 4A, 4B, and 4C) between rows 1–11 are not shown.

To move to the following table, click "SAVE."

• Table 7: TDS/TCS credit received—View the automatically drafted GSTIN-by-GSTIN details of TDS/TCS credit received over the fiscal year. It is uneditable.

Once all the records have been added, select "BACK" to return to the GSTR-4 dashboard (Annual Return).

Step 7: To preview the saved return, click the 'PROCEED TO FILE' option.

The return's status is "Ready to file as of (date)."

To download a copy of the prepared return for your evaluation and records, click either the "DOWNLOAD GSTR-4 SUMMARY (PDF)" or the "DOWNLOAD GSTR-4 (EXCEL)" option.

Step 8: Before continuing, pay any applicable taxes, interest, and late fees listed in table 8. Tax, Interest, Late Fee Payable and Paid." For reference, the cash ledger balance is also displayed. There are two ways to pay:

1. If there isn't enough money in the electronic cash ledger, click the "CREATE CHALLAN" button to make a full or partial payment. After choosing a payment method (such as NEFT, RTGS, over-the-counter, or net banking), the challan will be generated.

2. If an electronic cash ledger has enough funds to cover the entire amount, the cash will be automatically deducted from the tax payment. The 'Additional cash required' field shows no value.

To evaluate the amended GSTR-4 return and move on to the next stage, select either "DOWNLOAD GSTR-4 SUMMARY (PDF)" or "DOWNLOAD GSTR-4 (EXCEL)".

Step 9: Use DSC or EVC to submit the GSTR-4 return.

Select the declaration checkbox and the authorised signature on the tax payment page's bottom. The 'FILE GSTR-4' button should be chosen.

On the "File return/statement" screen, click either the "FILE WITH DSC" or "FILE WITH EVC" button after confirming by selecting "YES" on a warning alert.

Your actions will result in the events listed below:

1. The return's status now reads "Filed."

2. A created Application Reference Number (ARN) is shown on the screen.

3. Those registered with the GST portal receive a confirmation message via SMS and email.

You can refer to our detailed article here to learn about GST Returns. For a seamless and automated process of filing returns, you can take a trial of Busy Accounting Software to help you carry out your GST-related tasks efficiently.