For small businesses and service providers under the Composition Scheme, filing compliance isn’t as extensive as for regular taxpayers. But it isn’t optional either. One of the most important filings is GSTR 4 — the annual GST return that summarises all activity under composition.
Since FY 2019-20, the compliance flow has been simplified:
- CMP-08 is filed quarterly, for payment of self-assessed tax.
- GSTR-4 is filed annually, consolidating the year’s data.
For CFOs and tax managers, understanding GSTR-4 isn’t just about meeting a filing requirement. It’s about ensuring that working capital, vendor relationships, and tax records remain consistent and audit-ready.
What is GSTR 4?
GSTR 4 is the annual return to be filed by taxpayers registered under the Composition Scheme, including:
- Standard composition taxpayers (traders, manufacturers, restaurants).
- Service providers notified under the special composition scheme.
- Businesses that opted out of composition mid-year but were under it for any part of the FY.
It contains a summary of outward supplies, inward supplies, import of services, and reverse charge liabilities. Until FY 2018-19, you had to file this return quarterly. With the introduction of CMP-08, restructuring happened to turn into an annual return from FY 2019-20 onward.
Turnover Limit for Filing GSTR-4
Not all businesses can opt for composition. The turnover limit decides eligibility:
- Traders, manufacturers, and restaurants: Up to ₹1.5 crore (₹75 lakh in North-Eastern and hill states).
- Service providers (special scheme): Up to ₹50 lakh.
If your turnover crosses this limit, you must shift to the regular GST scheme and file normal GST returns instead of GSTR-4.
For many small businesses, staying under the threshold keeps compliance simple. But once you grow, advance planning for transition is key.
Due Date of GSTR 4
- For FY 2019-20 to FY 2023-24: The due date was 30th April of the following financial year (subject to government extensions).
- From FY 2024-25 onward: The due date has shifted to 30th June of the following year, as per Notification No. 12/2024–Central Tax dated 10th July 2024.
Example: For FY 2024-25, you must file GSTR 4 by 30th June 2025.
This two-month extension gives composition taxpayers additional time to consolidate CMP-08 filings, reconcile records, and file accurately — a relief for small businesses that often close books closer to May/June.
As per an advisory dated 7th June 2025, starting July 1, 2025, GST returns—including GSTR‑4—cannot be filed if they are more than three years overdue from the original due date. That means if your GSTR‑4 for FY 2021–22 (originally due 30 April 2022) was not filed, you can’t file it now—it’s now beyond time.
Who Should File GSTR-4?
Eligible to file GSTR-4:
- Composition Scheme taxpayers (traders, manufacturers, restaurants).
- Service providers covered under the notified composition scheme.
- Taxpayers who opted out of composition during the year.
Not eligible:
- Non-Resident Taxable Persons.
- Casual Taxable Persons.
- ISD (Input Service Distributors).
- TDS/TCS deductors and collectors.
- OIDAR service providers.
- UIN holders.
- Regular taxpayers outside composition.
Format of GSTR 4
The annual GSTR-4 has nine tables:
- GSTIN – Auto-populated.
- Name – Legal and trade name (auto-populated).
- Aggregate Turnover – Auto-populated.
- Inward Supplies & Liabilities – Captures inward supplies, reverse charge transactions, and import of services (Tables 4A–4D).
- CMP-08 Summary – Liability as reported in CMP-08 (auto-populated).
- Tax Rate-Wise Summary – Break-up of inward and reverse-charge supplies, with IGST, CGST, SGST, and CESS auto-computed.
- TDS/TCS Credit Received – Details of deductor/collector, invoice values, and TDS/TCS amounts credited.
- Tax, Interest & Late Fee – Tax payable (from Table 6), tax already paid (CMP-08), balance liability, interest, and late fee.
- Refunds – Claim excess tax paid, if applicable.
You can file the form using DSC or EVC.
Late Fee for GSTR-4
The government rationalised late fee structure to reduce the burden on small businesses:
- ₹50 per day (₹25 CGST + ₹25 SGST), capped at ₹2,000 per return.
- Nil liability cases: ₹20 per day (₹10 + ₹10), capped at ₹500 per return.
This is a significant relief compared to the earlier uncapped daily late fee that could go up to ₹5,000.
Can You Revise GSTR-4?
No. Once filed, you can not revise GSTR-4 with adjustment of errors in future returns.
Why Accuracy in GSTR-4 Matters
For small businesses, GSTR-4 may feel like a tick-box compliance task. But it directly impacts:
- Working capital: Ensures correct reporting of liabilities vs CMP-08 payments.
- Audit readiness: Prevents discrepancies during departmental scrutiny.
- Governance: Signals financial discipline to stakeholders and vendors.
- Future scheme eligibility: Incorrect filings may restrict ability to re-enter composition in future years.
For CFOs, the takeaway is clear: while the compliance load is lighter for composition taxpayers, accuracy in GSTR-4 is non-negotiable.
Final Word
GSTR 4 isn’t just another form. It’s the year-end checkpoint for all composition taxpayers — ensuring claim for reconciliation, liability settlement, and refunds (if any) for quarterly tax payments (CMP-08).
With the due date shift to 30th June from FY 2024-25, businesses now have more breathing space. But that doesn’t reduce the importance of timely filing. For tax leaders, ensuring governance at this stage is critical to avoid penalties, protect working capital, and stay audit-ready.
