GSTR 4 is an annual summary return that has to be filed by composition taxpayers, it consists of details of outward, inward supplies, import of services, and inward supplies attracting reverse charge, tax payable, tax paid etc. Taxpayers whose aggregate turnover does not exceed Rs.1.5 crores and Rs.75 crores for north eastern states can opt for the composition scheme. In this scheme quarterly returns in form CMP-08 have to be filed and tax paid by 18th of the month succeeding the quarter and the annual return GSTR-4 has to be filed by 30th April following the specific financial year.
Latest Amendments in GSTR 4
The following are some of the important amendments introduced by the GST authorities while filing GSTR 4 for composite dealers.
- As per notification CGST(R) Notification No.2/2019 dated 7th march 2019, all composition taxpayers including service providers must file GSTR 4 annually. Previously the return had to be filed quarterly. With the amendment vide CGST Notification no. 21 dated 23rd April 2019, the return was made yearly. The return has to be filed by the taxpayer who was registered as a composite taxpayer even for a single day during the financial year.
- Notification No. 02/2023 dated 31st March 2023 issued by CBIC: This notification is with regard to waiver of late fees for composition taxpayers. Late fee for the periods from July 2017 till FY 2021-22 has been waived fully for taxpayers filing Nil GST returns, and Rs.500/-for others, provided the returns are filed between 01.04.2023 to 30.06.2023.
- Notification No. 03/2023 dated 31st March 2023 issued by CBIC: As per this notification CBIC provides amnesty to registered persons whose registrations have been cancelled on or before 31-12-2022, due to non-filing of GST Returns.
- CGST notification no. 21 dated 1st June 2021: This notification deals with late fee for delay in filing GSTR-4. As per section 47 of CGST act 2017, a late fee of Rs.200/- per day (CGST+SGST+UTGST) subject to a maximum of Rs.2000/- if there is tax liability and Rs.500/- if there is no tax liability.
- CGST Notification no. 21 dated 23.04.2019: As per this notification, the due date for filing GSTR-4 for the FY 2023-24 was notified as 30th April 2024.
- CGST Notification no. 21 dated 23.04.2019: As per this notification, the due date for filing GSTR-4 for FY2022-23 was notified as 30th April 2023.
- CGST Notification no. 7 dated 26-5-2022: This notification was issued for waiver of late fee for returns furnished in the period 1st May 2022 to 30th June 2022.
- Official advisory issued by GSTIN regarding negative liability in GSTR-4: Negative liability is reflected for taxpayers when the value is not shown in table 6 of GSTR-4 but have deposited the cash while filing GST CMP-08. The remedy for this a) if due to an inadvertent mistake the value is not shown in table 6 of GSTR-4, then taxpayer has to raise a ticket to nullify the amount available in negative liability statement b) if there is no liability to be paid during the year, the amount paid through GST CMP-08 can be utilized to pay the liability of future tax periods.
Benefits of the amendments to GSTR 4
The important changes introduced by the authorities have brought many benefits to the taxpayers registered under the composition scheme. They are as follows:
- Simplified Filing process: The new format of online creation and submission of GSTR-4 made filing simpler by eliminating multiple returns. It has streamlined the reporting process and made compliance easier for the taxpayers.
- Transparency and Reduction of Errors: The auto-populating feature and the summary format of the return ensured transparency and reduction of errors in the returns submitted.
- Required Information to be Filled: The questionnaire format where the taxpayers need to fill only those tables that are mandatory and relevant to the taxpayer simplifies the process of filing the return. Only those tables for which the taxpayer has selected yes will be filled.
- Nil Returns made Easier: For nil-return the taxpayer does not need to fill any details. The return can be filed upon authentication only.
- New Options: While filing, the ‘Submit GSTR-4’ and ‘File GSTR-4’ with DSC/EVC options are removed and the’ Proceed to File’ option enabled making the filing process simpler.
- Time and Cost Savings: Valuable time and effort of composition taxpayers can be saved because of the simpler filing process which allows them to focus on their core business operations.
These changes have made filing GSTR-4 user friendly and simple for the composition taxpayer.
Frequently Asked Questions
- Can GSTR-4 be amended?
Answer: GSTR-4 cannot be rectified or revised, once it is filed. The rectification has to be done in the next return under the head previous tax period in GSTR-4.
- How is negative liability adjusted in GSTR-4?
Answer: When the cash ledger shows a negative balance, the taxpayer has to deposit the amount through the challan for the amount. He can request a refund of the excess amount if the payment has been made through DRC-03, DRC-08, or GSTR-4 of the following Financial Year.
The significant changes in the GSTR-4 return format have simplified the filing process and enhanced compliance. The return which was to be filed quarterly previously has to be filed annually now which has reduced the burden for small businesses and streamlined the reporting system. The simplified process saves time and effort allowing small businesses to concentrate on their core business operations. The simpler process helps taxpayers adhere to the filing deadlines, ensure accuracy in the reporting and enjoy the benefits of the composition scheme and fulfill their tax obligations.
GSTR-4, the Quarterly Return for Composition Taxpayers, is a crucial component of many Countries’ Goods and Services Tax (GST) systems. It is specifically designed to simplify the tax compliance process for small businesses operating under the composition scheme.
The composite scheme was introduced to make compliance simple and easy for small businesses. It is mandatory for all taxpayers registered under the composite scheme to file annual return in form GSTR-4.