What is GSTR - 4?

The GSTR 4 is a return under GST that needs to be filed once every 3 months by registered tax payers who have signed up for the composition scheme (those who opt for this scheme are known as compounding vendors). They would be required to pay taxes at fixed rate without any input tax credit facilities.

  • The taxpayer is only required to indicate the total consolidated value of supplies made during the period and the tax paid at the composition rate.
  • Taxpayer will also need to declare invoice-level purchase information for the purchases from normal taxpayers, which will be auto-drafted in Form GSTR 4A from supply invoice uploaded by counter-party taxpayers in GSTR-1.

Dates associated with the GSTR-4

  • This return for a particular quarter can be filed immediately upon the completion of that quarter.
  • The last day to file the GSTR-4 is 18th of the month following that quarter. (e.g.: If you are filing the GSTR-4 for the July-September quarter, then you have to file it before 18th of October.)

Prerequisites to file the GSTR-4:

    • We have to be a registered tax payer under the GST as well as a compounding vendor (the aggregate turnover of your business must be less than 75 lakh rupees/annum)
    • We need to keep track of all purchases, especially those you made from businesses who have registered under the GST along with the invoices they give you for your purchases. (B2B purchases)

What details must be filed in GST-4 return?

GSTR-4 return would consist of invoice wise inter-state and intra-state inward supplies received from registered and unregistered persons. In addition to invoice wise details of inward supplies, the taxpayer must furnish consolidated details of outward supplies.

The information pertaining to outward supplies furnished by regular taxpayers on the 10th of every month would be matched with the GSTIN of the composition scheme supplier. Hence, the composition taxpayer would only have to add, correct or delete the GSTIN matched details shown on the GSTR-4 filing and file the return. 

Contents of the GSTR-4

  1. GSTIN –Here you have to specify your unique PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).
  2. Name of the Taxpayer –This field should contain the name of the registered tax payer for our business.
  3. Address – This section must contain our business address.
  4. Period of Return (From and To) –A taxable person is required to select from a drop down the relevant month and year respectively for which GSTR-4 is being filed.
  5. Inward Supplies including supplies received from unregistered persons
  • Here, we have to record the details of all purchases and inward supplies that you have received during the tax period. This includes purchases made from both registered and unregistered tax payers along with the details of transactions under reverse charge.
  • We can amend/change/update the details of the purchases and inward supplies that we made during earlier tax periods under Section 5A of GSTR-4.
  1. Goods / Capital goods received from Overseas (Import of Goods) –
    • Under this section, you are required to report the details of all the capital goods that we have imported during the tax period.
    • Using the Section 6A of GSTR-4, we can amend or update the records of imports that you have made during the previous tax periods.
  2. Services received from a supplier located outside India (Import of Services)
  • Using this section, we can report all the services that you have imported from overseas vendors during this tax period.
  • Just like the other sections,we can amend or update the details of services that you have imported during the previous tax periods using the Section 7A of the GSTR-4.
  1. Outward Supplies Made –
  • Under section 8, the compounding dealer, must report the details of all sales and supplies that you have made to our customers during this tax period.
  • This includes both intra-state and interstate transactions as well as non-GST supplies.
  • The details of the same during previous tax periods can be amended/updated by you using the Section 8A of the GSTR-4.
  1. Details of Credit/Debit Notes issued and received –
  • Here,we must record the details of all the debit notes and credit notes that you have recorded during this tax period.
  • Amendments/updates to the details of debit notes and credit notes recorded during previous tax periods can be made using the Section 9A of GSTR-4.
  1. TDS Credit received –This section will contain the details of the credit you received whenever tax was deducted at the source during payments made to us by other businesses.
  2. Tax Liability under reverse charge arising on account of the time of supply without receipt of Invoice –
    • Under this section, we record the details of all the instances where an unregistered vendor supplies goods and/or services to we during this tax period without an invoice while we paid the GST on their behalf under reverse charge.
    • Section 11A of the GSTR-4 can be used to make amendments/updates to the details of the above mentioned scenario under section 11 that was recorded during previous tax periods.
  3. Tax already paid on account of the time of supply for invoices received in the current period relating to reverse the charge -Under this section,we are required to declare the details of the tax we paid on invoices that we received from our vendors during this period under reverse charge.
  4. Liability Payable –This data will be calculated based on the information provided by us under all the above sections.
  5. Details of Tax Payment –Under this section, we can record/maintain the details of all the taxes you have paid during previous tax periods.
  6. Refund Claimed –We can get a refund on the balance amount if the tax deducted by our counter parties (companies that did business with you) is greater than the tax that you are liable to pay for that period. 

Incase our business turnover exceeds 75 lakhs

Incase our business turnover exceeds 75 lakhs at any given point of time within a financial year, we will no longer be eligible to pay taxes at the compounding rate. Instead, we will now be liable to pay taxes under the normal rates along with the added responsibility of adhering to all the rules that apply to a normal vendor. Hence, we have to make this declaration whenever we file the GSTR-4.

To access the rules & formats of GSTR-2, please click on the link below:

 GSTR-4

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