GSTR-4: the annual return for composition taxpayers

Who is a composition taxpayer?

The composition scheme under section 10 lets small businesses pay GST at a flat rate on turnover instead of charging tax on each invoice. Manufacturers and traders with aggregate turnover up to ₹1.5 crore (₹75 lakh in certain special category states) can opt in. Service providers can opt under section 10(2A) with turnover up to ₹50 lakh.

Composition dealers issue a bill of supply, cannot collect GST from customers, cannot claim input tax credit and cannot make inter-state outward supplies of goods. In exchange, compliance is light: one quarterly payment statement and one annual return.

What goes into GSTR-4?

GSTR-4 is a year-end summary. It shows the turnover declared and tax paid in each quarter's CMP-08, inward supplies from registered and unregistered suppliers, reverse charge purchases, imports of services, and the TDS or TCS credit received. Inward supply data is auto-populated from suppliers' GSTR-1 and can be viewed in GSTR-4A.

Since GSTR-4 also carries inward supplies, it gives the department a view of your purchases. Officers use this to test whether declared turnover is plausible, so keep purchase records complete.

Due date, late fee and interest

GSTR-4 is due on 30 April following the end of the financial year. The government has extended this date in past years, for example to 30 June 2025 for FY 2024-25, so check for notifications each year. GSTR-4 cannot be filed after three years from its due date; the portal began barring FY 2021-22 GSTR-4 returns from December 2025.

The late fee is ₹50 a day (₹25 CGST plus ₹25 SGST), capped at ₹2,000. For a nil return it is ₹20 a day, capped at ₹500. Interest at 18% a year applies to tax that should have been paid through CMP-08 but was paid late, including any shortfall discovered while preparing GSTR-4.

What data do you need?

Most of GSTR-4 is a roll-up of figures you have already reported during the year through CMP-08. Keep these records together so the annual numbers agree with each quarter and with your books.

• All four CMP-08 statements filed for the year and payment challans
• Sales register showing turnover, including exempt supplies
• Purchase register split between registered and unregistered suppliers
• Details of reverse charge purchases and imports of services with tax paid
• Any TDS or TCS credit received from government buyers or e-commerce operators

Common errors and consequences

Typical mistakes are declaring turnover in GSTR-4 that does not match the four CMP-08s, ignoring reverse charge liability, and continuing in the scheme after turnover crosses the limit. Once aggregate turnover crosses the threshold during the year, you must leave the scheme within seven days through Form CMP-04 and start charging regular GST.

Non-filing of GSTR-4 beyond three months from the due date is a ground for cancellation of registration under section 29(2). It also invites a notice in GSTR-3A and best judgement assessment. Refogo's partner professionals can file GSTR-4 and CMP-08 for a fixed fee.

Step by step

1. 1Check all CMP-08s are filed

   GSTR-4 can be filed only after the four quarterly CMP-08 statements for the year.

2. 2Reconcile turnover and purchases

   Match books with CMP-08 figures and GSTR-4A inward supply data.

3. 3Open GSTR-4 on the portal

   Select the financial year and fill tables for inward supplies, tax paid and TDS/TCS credit.

4. 4Pay shortfall with interest

   Pay any additional tax and interest discovered during reconciliation.

5. 5File with DSC or EVC

   Preview, pay late fee if any, and file the return.