GSTR-4 Filing Explained: Who Needs to File, Turnover Criteria, Deadlines and Penalties

Tushar operates a stationery business, and in one year, it makes around ₹50,00,000. The Composition Plan worked best for him, so he did not have to complete complicated filing procedures. From now on, he will submit GSTR-4 only once every quarter, instead of once a month.

Key Details:
 

Filing GSTR-4 helps Tushar save time and focus on his business. If he misses the deadline, he pays a small penalty. Simple and easy!

What is GSTR-4?

Businesses under the Composition Scheme can fill out a GSTR-4 instead of a GST return. It allows certain taxpayers to submit returns every 3 months, which lowers compliance costs.

Key Points About GSTR-4
 

• Who Files: Small businesses with turnover up to ₹1.5 crore (₹75 lakh for some states).
   
• Tax Rate: Pay a fixed GST rate (1% for traders, 5% for restaurants, 6% for service providers).
   
• Filing Frequency: Once every quarter (total 4 times a year).
   
• Due Date: 18th of the next month after the quarter ends.
   
• Late Fee ₹50 per day if delayed (₹20 for nil returns).

Example: Tushar’s Stationery Shop
 

• Tushar’s annual turnover: ₹50,00,000 (below ₹1.5 crore limit).
   
• He opts for the Composition Scheme and files GSTR-4 every quarter.
   
• Pays 1% GST on sales instead of the regular GST rates.
   
• Files by 18th July, October, January, and April.
   

GSTR-4 Summary Table:
 

As a small business, Tushar can save time and avoid complicated GST filing with GSTR-4.

Who Needs to File GSTR-4?

GSTR-4 is the form used by small businesses that go under the Composition Scheme of GST. Filing your tax return becomes simpler because there are fewer regulations, and taxes are lower.

Businesses That Must File GSTR-4
 

• Small traders & manufacturers: Yearly turnover up to ₹1.5 crore (₹75 lakh in some states).
   
• Restaurants (not serving alcohol): Up to ₹1.5 crore turnover.
   
• Small service providers: Up to ₹50,00,000 turnover.
   
• Businesses selling only within their state (no interstate sales).

Example: Tushar’s Business
 

• Tushar runs a stationery shop with ₹50,00,000 yearly sales.
   
• He cannot sell outside his state or online.
   
• He chooses the Composition Scheme to pay 1% GST and file GSTR-4 quarterly.

Who CANNOT File GSTR-4?
 

GSTR-4 is designed for those small, local businesses who prefer keeping tax filing simple. When these conditions apply, you can get savings in time and taxes with GSTR-4.

Turnover Criteria for GSTR-4 Eligibility

GSTR-4 is only for small businesses with limited sales. The government sets maximum turnover limits to determine who can utilise this simplified tax scheme.

Who Can File GSTR-4?
 

• Regular Businesses (Traders/Manufacturers):
   
  • Maximum ₹1.5 crore yearly turnover
     
  • Special category states (like NE states): ₹75,00,000
     
• Restaurants (without an alcohol license):
   
  • Same ₹1.5 crore limit
     
• Service Providers:
   
  • Maximum ₹50,00,000 yearly turnover

Example: Tushar's Stationery Shop
 

• Sells notebooks, pens in his local market.
   
• Last year's total sales: ₹80,00,000.
   
• Eligible for GSTR-4 (below ₹1.5 crore limit).
   
• Pays only 1% tax instead of the normal GST rates.

Turnover Limits for GSTR-4
 

Because they are below the ₹1.5 crore limit, Tushar’s shop qualifies for the scheme. If sales exceed the limit, he has to begin following regular GST filing procedures. Because of the scheme, small shops like Tushar can cut their tax bill and file simpler papers.

Due Dates for GSTR-4 Filing

GSTR-4 must be filed quarterly (every 3 months). The deadline is always the 18th of the next month after each quarter ends.

Key Due Dates
 

• April-June (Q1): File by 18th July
   
• July-September (Q2): File by 18th October
   
• October-December (Q3): File by 18th January
   
• January-March (Q4): File by 18th April
   

Example: Tushar's Filing Scheule
 

Tushar puts these 4 dates down as important in his calendar. He must pay a ₹50 late fee every day after missing the payment. Sending the GST return on time maintains compliance with the simple GST rules of his stationery store.
 

Penalties for Late GSTR-4 Filing

Missing GSTR-4 deadlines costs money. The penalty grows daily until you file.

Late Fees You Must Pay
 

• Normal Return: ₹50 per day (Max ₹2,000)
   
• Nil Return (no sales): ₹20 per day (Max ₹500)

Example: Tushar's Late Filing
 

Tushar learns it's cheaper to file on time. The 18th of July/Oct/Jan/April are his key dates to remember. Even small delays add up for his stationery shop's profits.

Conclusion

People like Tushar, who own small businesses, can find tax filing easier with GSTR-4. Because of the Composition Scheme, Tushar only pays 1% GST on his annual sales of ₹50,00,000 and needs to file returns only four times each year. Because there are four deadlines per year (18th July, October, January and April), Tushar finds it easy to be prepared and pay on time. 

The day-to-day minor penalty (₹50) does not bother Tushar as he is aware that filing on time allows his business to be compliant and stress-free. Since his shop meets the scheme’s low turnover limit (₹1.5 crore), he does not need to worry about complicated tax rules and can give his attention to the customers. 

If Tushar stays within this limit for sales, does not grow to other states or online and does not offer online products, GSTR-4 is the convenient way to manage his GST. Because of this system, Tushar and other small shop owners spend less time and effort on filing taxes.

FAQs 

1. What is GSTR-4?

GSTR-4 is a simple quarterly GST return for small businesses under the Composition Scheme. Instead of filing monthly returns, eligible businesses file just 4 times a year and pay a fixed tax rate.

2. Who can file GSTR-4?

Small shop owners, manufacturers, and restaurants with sales up to ₹1.5 crore (₹75 lakh in special states) or service providers up to ₹50 lakh can use this scheme.

3. How much GST does a composition dealer pay?

Traders pay 1%, restaurants pay 5%, and service providers pay 6% of their turnover as GST under this scheme.

4. When is GSTR-4 due?

The deadline is always the 18th of next month after each quarter ends (July 18, October 18, January 18, April 18).

5. What if I file GSTR-4 late?

You pay ₹50 per day as a late fee (₹20 for nil returns), with maximum penalties of ₹2,000/₹500 respectively.

6. Can I sell to other states with GSTR-4?

No, composition dealers like Tushar can only sell within their state. Interstate sales require regular GST registration.

7. Do I need to file invoices in GSTR-4?

No, you just report total quarterly sales - no need to upload individual invoices like regular GST filers.

8. Can I switch from composition to regular GST later?

Yes, but you'll need to file Form GST CMP-04 and start filing monthly returns from the next quarter.

9. Is GSTR-4 the return for composition dealers?

You must also file an annual return, CMP-08, by April 30, summarising all quarterly payments made.

10. What happens if my sales cross ₹1.5 crore?

You must immediately switch to regular GST and inform the tax department within 7 days of exceeding the limit.

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