GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers

GSTR-4

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers

GSTR-4

GSTR-4 is an annual return that must be filed by all taxpayers registered under the GST Composition Scheme. If you’re a small business paying GST at a fixed rate and looking for a simplified compliance process, this guide walks you through the entire online filing process for GSTR-4—from prerequisites and deadlines to step-by-step instructions and troubleshooting tips.

What is GSTR-4?

GSTR-4 is an annual GST return specifically designed for composition scheme taxpayers. Until FY 2018-19, it was a quarterly return. However, starting FY 2019-20, it became an annual return while tax payments continue to be made quarterly through CMP-08.

GSTR-4 includes:

  • Summary of quarterly CMP-08 filings

  • Inward supplies (purchases)

  • Outward supplies (sales, if any)

  • Taxes paid under the scheme

📌 Note: Once GSTR-4 is filed, it cannot be revised.

GSTR-4

Latest GSTR-4 Updates

🔹 53rd GST Council Meeting – June 22, 2024

 

The due date to file GSTR-4 has been extended to June 30 for all future years, effective from FY 2024-25 onwards.

🔹 Amnesty Scheme – March 31, 2023

For taxpayers who missed GSTR-4 filings for FY 2017 to 2022:

  • Late fee capped at Rs. 500 (Rs. 250 CGST + Rs. 250 SGST)

  • Nil returns: No late fee

Who Needs to File GSTR-4?

You must file GSTR-4 if:

  • You’re registered under the Composition Scheme for any part of the year

  • You opted out of the scheme mid-year

  • Your GST registration was cancelled, but you had composition status before that

  • You had no business activity (must file Nil GSTR-4)

When to File GSTR-4?

Annual Due Date: 30th June following the end of the financial year
(e.g., For FY 2024-25, the due date is 30th June 2025)

When to File GSTR-4?

  • Annual Due Date: 30th June following the end of the financial year
    (e.g., For FY 2024-25, the due date is 30th June 2025)

Late Filing Penalty

TypeLate FeeMax Penalty
Regular ReturnRs. 200/day (Rs. 100 CGST + Rs. 100 SGST)Rs. 5,000
Nil ReturnRs. 500 total (as per amnesty/notification)Rs. 500

Pre-Filing Checklist

Before filing GSTR-4:

  • Ensure you’re registered under the Composition Scheme

  • File all CMP-08 forms for the financial year

  • Keep turnover details of the previous financial year ready

Step-by-Step Process to File GSTR-4 Online

Step 1: Login to GST Portal

Go to 👉 www.gst.gov.in
Login using your credentials

Step 2: Navigate to GSTR-4

Services > Returns > Annual Return
Click on ‘File Annual Returns’

Step 3: Select Financial Year

Choose the relevant FY (e.g., 2024-25)

Step 4: Click ‘Prepare Online’

Read the on-screen instructions carefully

Step 5: Enter Turnover Details

Input aggregate turnover of the previous year. Enter “0” if there was none. Click ‘Save’

Step 6: File Nil GSTR-4 (If Applicable)

If no purchases or sales:

  • Tick ‘File Nil GSTR-4’

  • Click ‘Proceed to File’

Step 7: Fill Relevant Tables (if Not Nil)

Complete the following sections:

  • Table 4A: Inward supplies from regular dealers

  • Table 4B: Inward supplies under reverse charge

  • Table 4C: Supplies from unregistered dealers

  • Table 4D: Import of services

  • Table 5: CMP-08 summary (auto-filled)

  • Table 6: Outward supplies, if any

  • Table 7: TDS/TCS credit (auto-filled)

Step 8: Preview & Make Payments

  • Click ‘Proceed to File’

  • Download PDF/Excel preview

  • If needed, create a challan and pay via Electronic Cash Ledger

Step 9: File with DSC or EVC

  • Tick the Declaration

  • Select Authorized Signatory

  • File using DSC or EVC

  • Receive ARN confirmation via SMS/Email

Understanding GSTR-4 Tables in Detail

TableDescription
4AInward supplies from registered suppliers (regular)
4BInward supplies under reverse charge
4CSupplies from unregistered suppliers
4DImport of services
5CMP-08 summary (auto-filled)
6Outward supplies and reverse charge summary
7TDS/TCS credits (auto-filled)

How to File Nil GSTR-4

Conditions:

  • No purchases, sales, or other liabilities

  • All CMP-08 returns are Nil

Steps:

  1. Choose ‘File Nil GSTR-4’

  2. Click ‘Proceed to File’

  3. Sign and submit using DSC or EVC
    ✅ No late fee if filed before the due date

GSTR-4

Common Errors and Fixes

IssueSolution
“Records under processing”Wait and refresh page
Upload errorAvoid special characters, check internet
Saved data not visibleUse ‘Records per Page’ or Search
File not submittingEnsure all tables are filled, check DSC/OTP

Read More: GST Compliance Checklist for Financial Year 2025-26

Filing GSTR-4 is crucial for staying compliant under the Composition Scheme. Though it’s an annual return, quarterly CMP-08 payments are mandatory. If you qualify for a Nil return, the filing process is even faster.

Stay ahead of deadlines, avoid penalties, and always keep a copy of your filed return for your records.

Related Post

image

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers GSTR-4 is an annual return that must be filed by all taxpayers registered under the GST Composition Scheme.…
Read More
image

Business Transformation: Takeover of Proprietorship by Private Limited Company

Business Transformation: Takeover of Proprietorship by Private Limited Company The entrepreneurial journey often begins with a sole proprietorship, offering simplicity and direct control. However, as your business grows, the limitations…
Read More
image

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice As we step into the new financial year 2025-26, businesses must gear up for key compliance changes in GST,…
Read More

Book A One To One Consultation Now
For FREE

How can we help? *

GST Compliance Checklist for Financial Year 2025-26

GST

GST Compliance Checklist for Financial Year 2025-26

GST

Strategic Review & Action Plan for Businesses

As the new financial year 2025–26 begins, businesses must undertake a comprehensive introspection of their GST compliance framework. This includes both substantive law changes and procedural reforms. With several amendments becoming effective from April 1, 2025, aligning internal policies and operations with updated regulations is crucial. 

Key Legal Updates Under GST

Major Statutory Amendments – What’s New This Year?

One of the most significant changes is the amendment to the definition of Input Service Distributor (ISD) under Section 2(61) of the CGST Act. ISD is now restricted to distributing Input Tax Credit (ITC) only for input services and not goods. It specifically pertains to an office of the supplier receiving invoices for input services on behalf of distinct persons and distributing the credit as per Section 20.

Cross Charge vs. ISD – Know the Difference

While ISD pertains to input service credit distribution, cross charging refers to the taxable supply between distinct persons (same PAN, different GSTINs) under Schedule I of the CGST Act, even if done without consideration. Cross charge is applicable to both goods and services, while ISD applies only to services. Correct classification is key to avoiding litigation.

Reviewing Contracts – A GST-Focused Approach

Businesses should revisit vendor and customer agreements during renewals in April 2025. Contracts must reflect the updated GST provisions, such as tax liability clauses, ITC eligibility, indemnity terms, invoicing structure, and dispute resolution mechanisms.

Procedural Compliance – Start the Year Right

E-Invoicing – New Thresholds, Broader Applicability

E-invoicing under Rule 48(4) is now mandatory for registered persons whose aggregate turnover exceeds ₹5 crore in any financial year since 2017–18. It applies to B2B and export supplies. Exemptions continue for SEZs, banks, insurers, and others as specified.

GTA Compliance – Opting for Forward Charge

Goods Transport Agencies (GTA) opting for Forward Charge Mechanism (FCM) must file Annexure V between January 1 and March 31 of the preceding year. For FY 2025–26, this means the declaration must be filed by March 31, 2025. Once opted, the FCM continues unless Annexure VI is filed within the same time frame to switch back to Reverse Charge Mechanism (RCM).

Exporters & SEZ Units – File LUT Before Supply

To export goods or services without IGST payment, businesses must furnish a Letter of Undertaking (LUT) in Form RFD-11 on the GST portal before April 1, 2025. This eliminates the need for IGST upfront payment and enhances cash flow. Only those not prosecuted for tax evasion above ₹2.5 crore are eligible.

Composition Scheme – Enroll Before March 31

Eligible small businesses intending to opt for the Composition Scheme must file CMP-02 by March 31, 2025. Eligibility includes turnover limits and the nature of supplies. Inter-state supplies and certain services are excluded. Non-compliance or late filing disqualifies the entity from availing composition benefits.

Start-of-Year Operational Tasks

Invoice Numbering – Plan New Series in Advance

Every new financial year requires a fresh invoice series. Businesses must also ensure that e-invoicing compliance is met for the applicable turnover category. Vendors must be informed of changes if required.

HSN Code Compliance – Avoid Misclassification

Under Notification No. 78/2020, HSN code requirements vary:

  • 4-digit for turnover up to ₹5 crore

  • 6-digit for turnover exceeding ₹5 crore Accurate HSN reporting is essential to avoid audit flags and penalties.

Dynamic QR Code – Mandatory for Large B2C Suppliers

Businesses with aggregate turnover exceeding ₹500 crore must include a Dynamic QR Code on B2C invoices. This aids in digital payments and ensures better audit trails. Non-compliance can attract penalties.

Reconciliation – Your Monthly Internal Audit

Output Reconciliation – Catch Discrepancies Early

  • GSTR-1 vs. GSTR-3B: Ensure consistency between reported outward supplies and tax liability.

  • E-Way Bill vs. GSTR-1: Align dispatch data with tax filings.

  • E-Invoice vs. GSTR-1 vs. Books: Reconcile for consistent and accurate reporting.

Input Tax Credit – Claim What’s Yours, Correctly

  • Books vs. GSTR-2A/2B vs. GSTR-3B: Match ITC entries to portal data.

  • Reversal of Ineligible Credit: Identify and reverse disqualified claims.

  • Electronic Credit Ledger vs. Books: Validate ledger balances with financial accounts.

Read More: Mutual Funds and Stocks: Understanding Capital Gains Tax Implications in 2025

Managing Refunds – Don’t Let Time Lapse

Refund applications under Section 54 must be filed within two years from the relevant date. Regular reconciliation can help identify eligible refund opportunities related to exports, inverted duty, or excess cash ledger balances.

Credit & Debit Notes – Timely Recording is Key

Businesses must issue and report credit/debit notes accurately in GSTR-1 and ensure the tax impact is correctly reflected in GSTR-3B. Section 34 of the CGST Act governs the timeline and adjustment rules for such documents.

Related Post

image

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers GSTR-4 is an annual return that must be filed by all taxpayers registered under the GST Composition Scheme.…
Read More
image

Business Transformation: Takeover of Proprietorship by Private Limited Company

Business Transformation: Takeover of Proprietorship by Private Limited Company The entrepreneurial journey often begins with a sole proprietorship, offering simplicity and direct control. However, as your business grows, the limitations…
Read More
image

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice As we step into the new financial year 2025-26, businesses must gear up for key compliance changes in GST,…
Read More

Book A One To One Consultation Now
For FREE

How can we help? *

GST Amendments 2025: Impact and Implications from April 1

GST Amendments

GST Amendments 2025: Impact and Implications from April 1

GST Amendments

As the Goods and Services Tax (GST) regime approaches its eighth anniversary since its launch on July 1, 2017, the framework continues to evolve in response to compliance needs, technological advancements, and stakeholder feedback. The latest amendments coming into effect from April 1, 2025, mark a significant milestone in this journey—bringing major procedural and operational reforms that impact taxpayers, businesses, and tax professionals alike.

These reforms are aimed at enhancing compliance, tightening security, simplifying tax administration, and fostering accountability across all levels. Let’s explore eight major GST amendments that come into force this financial year and examine their legal basis, practical implications, and anticipated benefits.

Mandatory Multi-Factor Authentication (MFA) for All Taxpayers

To strengthen data security and prevent unauthorized access, MFA is now compulsory for all users accessing the GST portal, effective April 1, 2025. Earlier implemented in phases for larger taxpayers, this security feature is now applicable to everyone.

Legal Basis: Section 146 of the CGST Act, 2017

Authentication Methods: Password + OTP via SMS, Sandes App, or NIC-GST-Shield App

Rollout Timeline:

  • ₹20 Cr+ turnover: From Jan 1, 2025

  • ₹5 Cr+ turnover: From Feb 1, 2025

  • All others: From April 1, 2025

Benefits:

  • Enhanced data protection

  • Fraud prevention

  • Improved user accountability

  • Global cybersecurity alignment

  • Greater trust in the digital tax system

Upgraded E-Way Bill & E-Invoice Systems with Validity Restrictions

To ensure timeliness and transparency in goods movement, E-Way Bills can now only be generated for invoices issued within the last 180 days, with an overall cap of 360 days. Enhanced E-Way Bill and e-Invoice platforms will also include mandatory 2FA authentication.

Legal Basis: Section 68 of the CGST Act, 2017

Key Change: Restriction on backdated invoices and phased implementation of 2FA for all users

Implications:

  • Stronger checks against fake invoicing

  • More efficient monitoring and analytics

  • Discourages prolonged warehousing of goods

  • Environmentally sustainable operations

Sequential Filing Now Mandatory for GSTR-7 (TDS Returns)

Starting Nov 1, 2024, Tax Deductors must file GSTR-7 returns in chronological order without skipping periods. Even Nil returns must be filed to maintain sequence.

Legal Basis: Section 51, Rule 66, Notification No. 17/2024

Targeted Entities: Government departments, PSUs, corporations deducting TDS under GST

Advantages:

  • Improved TDS tracking and reconciliation

  • Smoother audits with uninterrupted data trails

  • Minimization of return filing inconsistencies

Biometric Authentication for Directors of Companies

To curb fraudulent registrations, company directors must complete biometric authentication at any GST Suvidha Kendra in their home state.

Legal Basis: Section 25; Rule 8 & 9 (Amended via Notification No. 20/2025)

Available From: March 4, 2025

Scope of Authentication:

  • Fingerprints, facial recognition, photo, and document verification

Key Benefits:

  • Prevention of fake registrations

  • Enhanced identity verification

  • Easier registration process across states

  • Aligns GST KYC with banking norms

Mandatory Input Service Distributor (ISD) Mechanism

From April 1, 2025, the ISD mechanism is mandatory for allocating ITC on shared services like rent, advertising, and professional fees across multiple GST registrations under a single PAN.

Legal Basis: Section 20; Rule 39 & 54 (Notification No. 21/2025)

Services Covered: FCM & RCM-based common input services

Expected Outcomes:

  • Equitable and accurate ITC distribution

  • Consistent practices across organizations

  • Reduced working capital needs

  • Better transparency and audit readiness

GST Rate Changes for Hotels and Used Cars

For Hotels:

  • Declared Tariff abolished; tax based on actual transaction value

  • 18% GST for room tariffs above ₹7,500/day

  • Full Input Tax Credit (ITC) eligibility

For Used Cars:

  • Uniform GST rate of 18% on margin value for all categories

  • Differential rates (12% for small cars, EVs) eliminated

Legal Basis: Rule 32(5) of CGST Rules, 2017

Positive Impacts:

  • Simplified valuation and compliance for hotels

  • Level playing field for the used car industry

  • Increased transparency and fair tax practices

  • Enhanced revenue collection for the government

New Invoice Series Requirement

  • Effective April 1, 2025, all taxpayers must initiate a new invoice series for the financial year. The series must be unique, sequential, and non-repetitive.

    Key Guidelines:

    • Separate series for different types (invoice, credit note, etc.)

    • ERP systems must be updated accordingly

    • Applicable to all e-invoicing eligible taxpayers (AATO > ₹5 Cr)

    Purpose:

    • Improve auditability

    • Standardize invoicing processes

    • Prevent duplication and discrepancies

GST Amendments

GST Waiver Scheme 2024 – Relief for Legacy Dues

A one-time GST Amnesty Scheme provides a waiver of interest and penalty for FY 2017–18 to 2019–20, subject to 100% payment of tax dues by March 31, 2025.

Legal Basis: Section 128A of the CGST Act, 2017

Application Forms: SPL-01 / SPL-02

Deadline: Apply by June 30, 2025

Why It Matters:

    • Enables resolution of long-standing disputes

    • Encourages voluntary compliance

    • Reduces financial and litigation burden for honest taxpayers

Read More: Impact of New Income Tax Slabs and TDS Thresholds Effective April 1, 2025

Strengthening Compliance While Easing Operations

The GST amendments effective April 1, 2025, signal a balanced approach by the government—tightening security and enforcement on one hand while simplifying procedures and offering relief on the other. While these reforms will demand greater diligence from taxpayers, they also enhance trust, transparency, and efficiency in the overall tax ecosystem.

For businesses, professionals, and tax administrators alike, adapting early and updating internal systems will be key to smooth compliance. These timely changes are a testament to India’s commitment to evolving GST into a more mature, resilient, and globally aligned tax regime.

Related Post

image

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers

GSTR-4 Annual Return Filing: Eligibility, Procedure, and Due Date for Composition Taxpayers GSTR-4 is an annual return that must be filed by all taxpayers registered under the GST Composition Scheme.…
Read More
image

Business Transformation: Takeover of Proprietorship by Private Limited Company

Business Transformation: Takeover of Proprietorship by Private Limited Company The entrepreneurial journey often begins with a sole proprietorship, offering simplicity and direct control. However, as your business grows, the limitations…
Read More
image

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice

Navigating GST Changes: 5 Essential Updates on E-Way Bill and E-Invoice As we step into the new financial year 2025-26, businesses must gear up for key compliance changes in GST,…
Read More

Book A One To One Consultation Now
For FREE

How can we help? *