GSTR-4: Return Filing, Format, Eligibility and Rules

What is GSTR-4?

What is it? GSTR-4 is an annual return filed by taxpayers who have opted for the composition scheme. This scheme allows eligible businesses to pay a fixed percentage of their turnover as GST instead of the usual detailed calculation.

Filing Frequency: Unlike regular taxpayers who file monthly/quarterly returns, composition dealers file GSTR-4 only once a year, by 30th April of the subsequent financial year.

Rule 4 of GST

Rule 4 under the Composition Scheme guidelines specifies the maximum annual turnover limit for opting into the scheme. Currently, it is ₹1 crore for manufacturers and traders, and ₹50 lakhs for service providers.

Who is Eligible for GSTR-4?

GSTR-4 is designed for taxpayers who have opted for the Composition Scheme, which is available to businesses with an annual turnover up to a specified limit. Small businesses often find this scheme advantageous due to reduced compliance requirements and a fixed tax rate.

Any taxpayer registered under the GST Act who opted for the composition scheme for even a single day during the financial year is eligible to file GSTR-4.

Is GSTR-4 Mandatory?

Filing GSTR-4 is mandatory for eligible taxpayers. Failure to do so can attract late fees and penalties.

Reasons for Mandatory Filing

Compliance with GST Regulations: Filing GSTR-4 is a legal requirement as per the GST Composition Scheme rules. Failure to do so can attract late fees and penalties, including:

Late fee of ₹50 per day for each CGST and SGST return not filed.
Maximum penalty of ₹10,000 for non-filing of returns.

Transparency and Record Keeping: GSTR-4 serves as a yearly summary of your business transactions under the composition scheme, promoting transparency and facilitating audits by tax authorities.
Benefits of Timely Filing: Timely filing of GSTR-4 ensures you stay compliant and avoids legal hassles. It also helps claim any input tax credit you might be entitled to under the composition scheme.

Difference Between GSTR-4 and GSTR-9

Feature	GSTR-4	GSTR-9
Purpose	Annual return for composition dealers	Annual return for regular taxpayers
Eligibility	Businesses opting for the composition scheme (turnover limit: ₹1 crore for manufacturers/traders, ₹50 lakhs for service providers)	All registered taxpayers under GST (except composition dealers)
Filing Frequency	Once a year (by 30th April of the subsequent financial year)	Annually (by 31st December of the subsequent financial year)
Data Reported	Summary of outward and inward supplies, imports, reverse charge liabilities, and tax payment details	Detailed transactions, tax liabilities, input tax credit claims, and reconciliation of tax payment with liability
Form Complexity	Relatively simpler	More complex and detailed
Late Filing Penalty	₹50 per day per CGST and SGST return not filed (maximum ₹10,000)	₹25 per day per CGST and SGST return not filed (maximum ₹5,000)

Also Read: GSTR-9: Applicability, Due Date and Compliance Details

FAQs

Do I need an accountant to file GSTR-4?

While the form is relatively straightforward, seeking professional guidance can ensure accuracy and avoid potential liabilities.

Can I file GSTR-4 after the due date?

Late filing attracts late fees, calculated per day.

What documents do I need to file GSTR-4?

Keep readily available your CMP-08 statements, purchase invoices, and import details.

Pharmaceutical Exports from India

India is a big deal in the world of medicine and vaccines. It makes a lot of generic medicines and vaccines that are used everywhere. India is even called the "Pharmacy of the World" because its medicines are good quality and not too expensive. Despite some problems, like supply chain issues, India's medicine exports are doing well. The USA, Belgium, and South Africa are some of the top places buying Indian medicines. The government helps by running programs to make the medicine industry stronger. Groups like Pharmexcil and the Department of Pharmaceuticals also lend a hand. Their job is to make sure everyone can get good medicines without paying too much.

GST VS OLD TAX STRUCTURE

Goods and Service Tax, commonly known as GST, is a consumption tax applied to the supply of goods and services. It replaces multiple indirect taxes, simplifying the tax system. Previously, India had a complex tax system with different types of taxes, causing inconvenience to individuals. This paper compares the current GST framework with the old tax system and discusses its impact on the Indian economy. The idea of GST was first proposed by the Vajpayee government in 2000 and was implemented in India on July 1, 2017, after passing through various stages of discussion and approval.

Incorporation of a Company In India

The process of forming a company involves incorporation, where it gains legal distinction from its owners. Initial steps, including promotion and incorporation, are crucial, with promoters conceptualising the business and registering it under specific laws. Following this, the company attracts investors, raises capital, and commences operations. Promoting a company involves critical decisions on its concept, structure, and capitalisation. Incorporation entails name approval, application filing, and obtaining a Certificate of Incorporation. Subsequently, capital subscription and commencement of business follow, ensuring compliance with legal requirements. Public companies undergo additional steps before initiating operations. Overall, incorporation offers benefits like limited liability, perpetual existence, and legal capacity. Compliance with regulations is essential, ensuring the company's lawful establishment and paving the way for its growth and success.