When GST return to be filed by composition suppliers in India

As per section 39(2) of CGST Act, every registered supplier paying tax under composition scheme has to file a quarterly return in form GSTR-4 electronically through the common portal. GSTR-4 shall be furnished every year on or before the 30th day of April following the end of the financial year. This means GSTR-4 shall be filed between 1st April to 30th April of the following financial year relevant to the year for which return is filed.

Composition suppliers are required to furnish a statement in the FORM GST CMP-08 containing details of payment of self-assessed tax, every quarter or part of the quarter by 18th day of the month succeeding the relevant quarter. Which means, composition suppliers are required to pay tax every quarter and file return in GSTR-4 annually.

In addition to composition suppliers, every registered person paying tax at concessional rate by availing the benefit of notification number 2/2019 CT ( R ) dated 07.03.2019 is also required to file form GSTR-4.

For instance, if as a composition dealer, you are filing quarterly returns for the quarter April-June, then the due date of filing is 18th July. In this case, you need to file GSTR-4 between 1st July to 18th July.

Please note, GST return filing is mandatory even if there is no transaction during a tax period. In case of no transactions, the supplier has to file Nil return.

A composition dealer can see all the inward supplies details received from a registered person filing GSTR-1 in form GSTR-4A through the common portal.

Details to be filed in GST return by a composition supplier

Before getting into the details to be filed in the GST return by a composition dealer, you must know that a composition dealer is neither entitled to input tax credit nor entitled to pass on any credit to its customers. Such composition dealers cannot even make interstate outward supply of goods.

Here are the details to be filed in GSTR-4;

  • Legal name and trade name
  • Inwards supplies details
  • Summary of self assessed liabilities
  • Consolidated details of outward supplies (not invoice wise details).

Invoice wise details of outward supplies not required as composition taxpayers are not entitled to pass on any input tax credit to its customers.

Corrections to outward supplies details furnished in past periods are required to be reported in the amendment table. In such an amendment, it’s necessary to mention the relevant past quarter for which rectifications are to be made. Invoice wise correction is not required to be specified.

GST Return for periods prior to availing composition scheme

In cases where a registered person is converted from a normal taxpayer to composition dealer, GSTR-1 will be available for filing only for the period during which the taxpayer was registered as a normal taxpayer. Thereafter, the composition taxpayer has to file GST return in the form GSTR-4.

If composition scheme has been opted by the registered person from the beginning of a financial year, then such person, where required, furnish statements or return relating to the period prior to opting for composition levy till the due date of furnishing the return for the month of September of the succeeding financial year, or furnishing of annual return of the preceding financial year, whichever is earlier.

The person opted for composition scheme, will not be eligible to avail input tax credit or ITC on receipt of invoices or debit notes from the supplier for the period prior to his opting for the composition scheme.

Return for the period prior to exiting from composition scheme

A registered person who has withdrawn the facility of composition scheme at his own motion or it has been withdrawn at the instance of the proper officer will, where required, furnish GSTR-4, relating to the period prior to his exiting from composition levy till 30th april following the end of the financial year during which such withdrawal or cessation falls. 

GST CMP-08 relating to the period prior to his exiting from composition scheme till 18th of the month succeeding the quarter in which the date of withdrawal or cessation falls.

When registration can be cancelled by the officer

As per section 29(2),a proper officer is empowered to cancel registration of taxable person if:

  1. a person paying tax under composition scheme has not furnished his GSTR-4 for 3 consecutive tax periods.
  2. any other taxable person has not furnished returns for a consecutive period of 6 months.

This means, if a composition dealer has not furnished return in form GSTR-4 for consecutive 3 quarters, then the proper officer can cancel registration of the taxable person. 

Please note, a person who has opted for a composition scheme, needs to compulsorily file GSTR-3B and GSTR-4 even if there is no business activity in the tax period. In such cases, they have to file nil return.

In addition to quarterly return in form GST-4, the composition scheme supplier is also required to file annual return U/S 44 of CGST AcAct in form GSTR-9A before 31st December following the end of financial year.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.