GSTR-4 is the annual return for businesses registered under the GST Composition Scheme. Designed for small businesses with turnover up to ₹1.5 crore, it simplifies compliance with lower tax rates, no ITC claims, and a single annual filing instead of monthly returns.
Not every business can opt for the composition scheme. Here are the key eligibility criteria and restrictions:
Aggregate turnover up to ₹1.5 crore (₹75 lakh for special category states — NE states & Himachal Pradesh, Uttarakhand, J&K)
Manufacturers, traders, and restaurant services (not serving alcohol). Service providers with turnover up to ₹50 lakh can opt for composition.
Must supply goods/services only within the same state. Inter-state supplies are NOT allowed under composition.
Suppliers making supplies through e-commerce operators are NOT eligible for composition scheme.
Composition dealers CANNOT claim Input Tax Credit (ITC) on their purchases. Tax paid on inputs becomes cost.
Cannot issue a tax invoice. Must issue a 'Bill of Supply' instead. Buyer cannot claim ITC on purchases from composition dealers.
Tax is paid on total turnover (not on individual invoices). Rates are significantly lower than regular GST rates:
| Category | CGST | SGST | Total Rate | Note |
|---|---|---|---|---|
| Manufacturers | 0.5% | 0.5% | 1% | On turnover — not on each invoice |
| Traders (Goods) | 0.5% | 0.5% | 1% | Includes both intra-state sales and purchases |
| Restaurant Services | 2.5% | 2.5% | 5% | Restaurants not serving alcohol |
| Other Service Providers | 3% | 3% | 6% | Under notification 2/2019 — turnover up to ₹50 lakh |
While GSTR-4 is annual, composition dealers must file CMP-08 every quarter. This is a simple challan-cum-statement for paying tax quarterly.
April to June
July to September
October to December
January to March
GSTR-4 is divided into the following sections. Each table captures a specific aspect of the composition dealer's activity:
Details of inward supplies attracting reverse charge mechanism (RCM). Composition dealers must pay GST on RCM supplies and report here.
Aggregate value of all outward supplies made during the year. Reported as a single consolidated figure — no invoice-level detail needed.
Self-assessed tax liability on outward supplies at applicable composition rates (1%, 5%, or 6%). Includes CGST, SGST/UTGST, and IGST (if RCM).
Details of tax paid — through cash ledger and TDS/TCS credits if applicable. Composition dealers cannot use ITC to pay tax.
Any interest on delayed payment (18% p.a.), late fee for delayed filing, and penalty amounts payable.
Visit gst.gov.in → Login with GSTIN → Navigate to Returns → Annual Return → GSTR-4
Choose the financial year for which you are filing. GSTR-4 is an annual return — one filing per year (changed from quarterly since FY 2019-20).
Before annual GSTR-4, ensure all 4 quarterly CMP-08 (challan-cum-statement) returns are filed for each quarter of the FY.
Report inward supplies attracting reverse charge (Table 4). Enter GSTIN of supplier, invoice details, and tax payable.
Provide aggregate turnover of all outward supplies (Table 5). Rate-wise breakup of composition tax payable.
Pay any additional tax liability through cash ledger. Create challan via 'Create Challan' if balance is insufficient.
Click 'Compute Liabilities' → Preview return → File via DSC or EVC → Download acknowledgment.
GSTR-4 annual return is due by 30th April of the following financial year. For FY 2025-26, the due date is April 30, 2026. CMP-08 quarterly statement is due by 18th of the month following each quarter.
Yes, you can opt out of composition scheme by filing GST CMP-04. The transition takes effect from the beginning of the next financial year. You must then file GSTR-1, GSTR-3B, etc. as a regular taxpayer.
No. Composition dealers are restricted to intra-state supplies only. Making inter-state supplies will result in automatic cancellation of composition registration.
If aggregate turnover exceeds the threshold during a financial year, the taxpayer must exit composition scheme, convert to regular registration, and start filing regular returns from the date of crossing the limit.
No. Composition dealers file GSTR-4 as their annual return. GSTR-9 is only for regular taxpayers. However, both must be filed before the respective due dates.