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.

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        Mitigating ITC Double Claiming Risks in the GSTR-2B Era

        GSTR-2B

        Mitigating ITC Double Claiming Risks in the GSTR-2B Era

        GSTR-2B

        1. Understanding the Transition to GSTR-2B

        The Shift from GSTR-2A to GSTR-2B

        The introduction of GSTR-2B in January 2022 marked a major transformation in India’s GST compliance framework. This change made GSTR-2B the definitive source for Input Tax Credit (ITC) claims, replacing GSTR-2A. The amendment through Section 16(2)(aa) of the CGST Act linked ITC eligibility strictly to supplier-reported invoices, eliminating prior flexibility.

        Why This Matters Now

        With increased audit scrutiny by GST authorities, particularly for FY 2021-22, businesses must ensure compliance. The transition phase has resulted in inadvertent double claims due to overlapping systems, making it essential to review ITC claims carefully.

        GSTR-2B

        2. Risks and Consequences of ITC Double Claiming

        How Double Claiming Happens

        A common pitfall in compliance arises from the shift to GSTR-2B. Consider this case: A manufacturing company claimed ₹10,000 ITC in its December 2021 GSTR-3B based on books, following Rule 36(4), since the supplier had not yet filed GSTR-1. When the supplier finally uploaded the invoice in January 2022, it appeared in GSTR-2B, automatically updating GSTR-2A. Unaware of the prior claim, the accounts department claimed the same ₹10,000 again in the January 2022 GSTR-3B.

        Financial and Compliance Risks

        Double claiming ITC leads to serious repercussions, including:

        • Mandatory Reversal: Excess ITC must be reversed via DRC-03 without exceptions.

        • Interest Liability: 18% p.a. interest under Section 50 applies from the date of utilization until reversal.

        • Penalties:

          • Non-fraudulent cases (Section 73): 10% of excess ITC or ₹10,000 (whichever is higher).

          • Fraudulent cases (Section 74): Penalties up to 100% if intent is established.

        • Audit Scrutiny: GST authorities thoroughly examine ITC claims, leading to potential disputes.

        3. Strategies to Prevent Double Claiming

        Step 1: Review Pre-January 2022 ITC Claims

        Examine GSTR-3B filings before January 2022 to track ITC claimed through books or GSTR-2A. Maintain detailed records of invoice details, including numbers, dates, GSTINs, and amounts.

        Step 2: Cross-Check ITC Claims Post-January 2022

        Compare ITC claimed in GSTR-3B from January 2022 onward against GSTR-2B data. Any matching entries require immediate reconciliation.

        Step 3: Reconcile Books with GSTR-2B

        Ensure each invoice appears only once in the purchase register. This is especially crucial for businesses with multiple branches or teams managing accounting processes.

        Step 4: Utilize GST Portal Tools

        The “Tax Liabilities & ITC Comparison” report provides a clear picture of discrepancies by comparing ITC claimed in GSTR-3B against available ITC in GSTR-2B.

        Step 5: Verify Invoice Data

        Cross-check invoice numbers, dates, and amounts to identify duplicates and prevent unintentional double claims.

        4. Legal Implications and Remedial Actions

        Audit Insights and Departmental Observations

        Since January 2022, GSTR-2B has become the sole basis for ITC eligibility. Any ITC claimed in excess of GSTR-2B amounts is treated as wrongful availment. While GSTR-2A remains useful for monitoring supplier compliance, it no longer determines ITC eligibility.

        Consequences of Non-Compliance

        Failure to comply results in:

        • Mandatory ITC Reversal: Businesses must reverse excess ITC with interest, regardless of intent.

        • Penalties: Depending on the case, penalties under Sections 73 and 74 can significantly increase financial liabilities.

        Read More: A Simple Guide to Advance Tax Calculation and Payment

        5. Conclusion: Strengthening ITC Compliance

        To ensure seamless GST compliance, businesses must:

        • Strengthen ITC reconciliation processes.

        • Monitor supplier GSTR-1 filings regularly.

        • Utilize GST portal tools to detect discrepancies early.

        By proactively addressing ITC double claiming risks, businesses can reduce financial liabilities, avoid interest and penalties, and prevent unnecessary audits and disputes.

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              Resolving GSTR-2B Input Tax Credit Issues: GSTN Advisory for FY 2023-24

              GSTR-2B

              Resolving GSTR-2B Input Tax Credit Issues: GSTN Advisory for FY 2023-24

              GSTR-2B

              The Goods and Services Tax Network (GSTN) recently addressed concerns about the non-generation of GSTR-2B statements for certain taxpayers. GSTR-2B is a critical document for taxpayers as it auto-populates details of eligible Input Tax Credit (ITC) from suppliers’ GSTR-1 filings. Without it, buyers cannot claim ITC, causing cash flow challenges and compliance issues. Here’s an overview of the problem, its implications, and the solutions suggested by GSTN.

              Key Challenges with GSTR-2B Generation

              Non-Generation of GSTR-2B

              GSTN, in its advisory dated November 16, 2024, highlighted two primary reasons for GSTR-2B not being generated:

              1. Quarterly Filers Under QRMP Scheme:
                Taxpayers under the Quarterly Return Filing and Monthly Payment (QRMP) scheme will only see GSTR-2B for the final month of the quarter. For example, in the October-December 2024 quarter, GSTR-2B will be generated only for December 2024, not for October or November.

              2. Non-Filing of GSTR-3B for Previous Periods:
                If a taxpayer hasn’t filed their GSTR-3B for prior months, their GSTR-2B for subsequent months will not be generated. For instance, if GSTR-3B for September 2024 remains pending, GSTR-2B for October 2024 will also not be available.

              GSTR-2B

              Implications for Taxpayers

              Impact on ITC Claims

              Under GST regulations effective January 2022, ITC can only be claimed for invoices reflected in GSTR-2B. If suppliers fail to upload invoices via GSTR-1 on the GST portal, these details will not appear in the buyer’s GSTR-2B.

              This creates significant issues:

              • Working Capital Strain: Buyers must pay their entire GST output tax liability without adjusting eligible ITC, leading to cash flow challenges.
              • Delayed ITC Claims: Buyers may only claim the pending ITC in future months, causing operational inefficiencies.

              Example:
              A buyer purchasing goods worth ₹10 crore at 18% GST pays ₹1.8 crore as tax. If the supplier fails to file GSTR-1, the buyer’s GSTR-2B won’t reflect this ITC. Consequently, the buyer must pay their full GST liability of ₹2.16 crore on onward sales without adjusting the ₹1.8 crore ITC, a situation that burdens cash flow.

              Solutions Suggested by GSTN

              GSTN’s advisory outlines steps to resolve discrepancies or non-generation of GSTR-2B:

              1. Supplier Compliance

              Buyers should ensure suppliers upload pending invoices in GSTR-1 before the cutoff date—November 30, 2024—to include them in the buyer’s GSTR-2B for FY 2023-24.

              2. Use the IMS Portal Recompute Option

              To address issues in GSTR-2B generation or mismatches with GSTR-3B:

              • Log into the IMS Dashboard on the GST portal.
              • Take action on any pending records to enable re-computation.
              • Click the ‘Compute GSTR-2B (OCT 2024)’ button.
              • Updated values will reflect in GSTR-2B and auto-populate GSTR-3B.

              3. Proactive Communication with Suppliers

              Taxpayers must regularly communicate with suppliers to ensure timely compliance with GSTR-1 filing to avoid future disruptions.

              Read More: Filing GST Annual Returns by December 31, 2024: What You Need to Know

              With the November 30, 2024, deadline fast approaching, GST-registered taxpayers must act quickly to resolve pending ITC issues for FY 2023-24. Ensuring accurate and timely filings by suppliers, leveraging the recompute option, and proactively addressing mismatches are critical steps to avoid losing ITC claims.

              For further assistance or queries, consult a tax professional or contact GSTN through the GST portal. Staying compliant not only optimizes tax benefits but also ensures smooth business operations.

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