Annual GSTR-4 Filing for Composition Dealers: Deadlines, Eligibility, and Penalties

This article explains GSTR-4, the annual GST return for composition scheme taxpayers in India. It outlines the current annual filing deadline of June 30th for the preceding financial year and details recent updates, including a three-year filing restriction effective July 2025. The document also covers the applicability of GSTR-4, the turnover limits for the composition scheme, and the current late fees for delayed submissions.

📖 3 min read read🏷️ GST Returns

The GSTR-4 serves as an annual return for taxpayers registered under the GST composition scheme. Prior to the 2018-19 financial year, this return was submitted quarterly. However, the quarterly requirement was subsequently replaced by Form CMP-08, which now mandates quarterly filing. This document provides a detailed overview of GSTR-4, including its applicability, turnover limits, filing deadlines, and associated late fees.

Recent Developments

As of June 7, 2025, the GSTN has imposed a new restriction, preventing taxpayers from filing their GSTR-4 if three years have passed since its original due date. This particular modification is scheduled for implementation on the GST portal starting with the July 2025 tax period, as per a recent advisory.

Understanding GSTR-4

GSTR-4 is an annual Goods and Services Tax return specifically for dealers who have opted into the composition scheme. While standard taxpayers typically submit two monthly returns along with one annual return (subject to certain exemptions), composition dealers are mandated to file Form CMP-08 quarterly and Form GSTR-4 annually. The deadline for GSTR-4 submission is June 30th of the financial year immediately following the reporting period.

GSTR-4 Filing Deadline

The GSTR-4 return must be submitted annually. The official deadline for its submission is June 30th of the year succeeding the relevant financial year. For instance, the GSTR-4 for the fiscal year 2024-25 is due by June 30, 2025. This revised deadline was established by CGST Notification 12/2024, issued on July 10, 2024. Previously, before FY 2018-19, the filing date was the 18th day of the month after each quarter. Furthermore, GSTR-4 returns cannot be filed more than three years past their original due date. This three-year restriction will be enforced on the GST portal starting from the July 2025 tax period, as confirmed by the GSTN's advisory dated 7th June 2025.

Who Must File GSTR-4?

GSTR-4 is mandatory for all taxpayers enrolled under the composition scheme. There isn't a specific turnover limit solely for filing GSTR-4. This requirement also extends to service providers who qualify for the special composition scheme, introduced by CGST (Rate) notification number 2/2019, effective from the financial year 2019-20.

Composition Scheme Turnover Criteria

The turnover threshold for GSTR-4 aligns with the limits set for taxpayers under the composition scheme. This scheme is open to manufacturers, traders, and restaurants (excluding those serving alcohol) with an annual turnover up to Rs 1.5 crore in most states, or Rs 75 lakh in designated special category states. For service providers, the turnover limit is Rs 50 lakh. The scheme aims to simplify tax compliance for small businesses primarily engaged in intra-state supplies, enabling them to pay GST at a fixed percentage of their turnover and file returns quarterly.

Revising GSTR-4 Submissions

Once GSTR-4 has been filed on the GSTN Portal, it cannot be subsequently revised.

Penalties for Delayed GSTR-4 Filing

Current regulations impose a late fee of Rs.50 for each day of delay, with a cap of Rs.2,000. If there is no tax liability, the maximum late fee is Rs.500. Previously, the late fee for late GSTR-4 filing was Rs.200 per day, with an overall maximum of Rs.5,000.

Frequently Asked Questions

What is the main benefit of opting for the GST composition scheme?

The primary benefit of the GST composition scheme is simplified tax compliance, including lower tax rates, fewer return filings, and reduced paperwork compared to the regular GST scheme.

How does the composition scheme differ for service providers versus manufacturers/traders?

The composition scheme for service providers has a lower annual turnover limit of Rs 50 lakh, compared to Rs 1.5 crore (or Rs 75 lakh in special states) for manufacturers and traders.

Are businesses under the composition scheme allowed to collect GST from their customers?

No, businesses registered under the GST composition scheme are not allowed to collect GST from their customers or claim Input Tax Credit (ITC). They pay tax out of their own pocket at a fixed rate on turnover.

Can a taxpayer switch from the regular GST scheme to the composition scheme during a financial year?

Generally, a taxpayer can opt for the composition scheme at the beginning of a financial year. Switching during an ongoing financial year is usually not permitted, except under specific circumstances or notifications from the GST Council.

What are the disadvantages of choosing the GST composition scheme?

Disadvantages include not being able to claim Input Tax Credit, restrictions on making inter-state supplies, inability to supply through e-commerce operators, and limited market reach due to inability to issue tax invoices to customers.

What is the turnover threshold for businesses to be eligible for the GST Composition Scheme?

For manufacturers, traders, and restaurants, the annual turnover limit is typically up to Rs 1.5 crore (Rs 75 lakh in special category states). For service providers, the limit is Rs 50 lakh.