GSTR-4 is a document that needs to be filed once every 3 months by registered tax payers who have signed up for the composition scheme (they are known as composition vendors). The GSTR-4 contains the total value of the sales and supplies made, the tax paid at compounding rate, and invoice-level details of purchases the composition vendor made from other registered tax payers during the tax period. When you make purchases from registered vendors, the information from their sales returns (GSTR-1) will be available in the GSTN portal as GSTR-4A) for you to use in your GSTR-4. Before you file your return, you can check this information, make changes if necessary, and add any details that were not auto-populated.
This return can be filed as soon as the relevant quarter ends. The last day to file the GSTR-4 is the 18th of the month following the end of the quarter. For example, if you are filing the GSTR-4 for the July-September quarter, you have to file it before the 24th of December.
Businesses with annual turnover up to Rs 1.5 crore can opt for composition scheme. Turnover of all businesses with the same PAN has to be added up to calculate turnover for the purpose of the composition scheme.
Only Manufacturers of goods, Dealers, and Restaurants (not serving alcohol) can opt for the composition scheme under Section 10. However, service providers can opt into a similar scheme for composition dealers notified by the CGST (Rate) notification no. 2/2019 dated 7th March 2019 where the total turnover limit is Rs.50 lakh.
Composition scheme : Applicable GST Rate
|Type of Business||CGST||SGST||Total|
|Manufacturers and Traders (Goods)||0.5%||0.5%||1%|
|Restaurants not serving Alcohol||2.5%||2.5%||5%|
A composition dealer is required to pay tax at a specific rate on total sales. Also, the dealer has to pay tax under reverse charge on specified purchases, purchase from unregistered dealers and import of services.
This means that Total GST payable = Tax on supplies (net of advance and goods returned) + tax on B2B transactions where reverse charge is applicable + tax on B2B purchases from unregistered suppliers, if applicable + Tax on Import of services.
The rate of tax on transactions under reverse charge, purchase from an unregistered dealer and import of services will be at normal rates, i.e. the rates applicable to the supplies. Rates under the composition scheme are applicable only to sales of a composition dealer.
Following are the conditions which must be addressed by the taxpayer to avail credit on input at the time of transition from composition scheme to the normal scheme: