GSTR-4 Filing Guide 2025: Eligibility Calculator, Deadlines & Composition Scheme Checklist
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What is GSTR-4? Understanding Composition Scheme
GSTR-4 is a quarterly return filed by taxpayers registered under the GST Composition Scheme. Unlike regular taxpayers who file monthly returns (GSTR-3B), composition scheme dealers enjoy simplified compliance with quarterly filing only.
The composition scheme targets small businesses with annual turnover up to Rs.1.5 crore (Rs.75 lakh for special category states). It allows them to pay tax at a fixed lower rate on turnover while avoiding complex GST compliance like detailed ITC registers.
What is a Composition Dealer?
A composition dealer is a taxpayer who has opted for the composition scheme under GST. This simplified tax regime is designed for small businesses and allows them to pay tax at a lower fixed rate on their turnover instead of the regular GST rates.
Composition dealer meaning: These are small taxpayers who choose convenience over input tax credit benefits. They must issue a Bill of Supply (not a tax invoice) and cannot collect GST separately from customers. The composition tax is calculated directly on their quarterly turnover.
Key Point: A composition dealer cannot supply goods or services to other composition dealers and claim ITC. This is why most B2B businesses avoid composition scheme.
Composition Scheme Tax Rates 2025
| Business Type | Tax Rate | Split |
|---|---|---|
| Manufacturers | 1% | 0.5% CGST + 0.5% SGST |
| Traders | 1% | 0.5% CGST + 0.5% SGST |
| Restaurants | 5% | 2.5% CGST + 2.5% SGST |
| Service Providers | 6% | 3% CGST + 3% SGST |
Tax Savings: A trader with Rs.1 crore turnover pays only Rs.1 lakh under composition (1%) versus Rs.5-18 lakh under regular scheme—that's 80-94% savings!
Who Can Opt for Composition Scheme in 2025?
To qualify for composition scheme, ALL criteria must be met:
- Turnover: Up to Rs.1.5 crore (Rs.75L for NE/Hill states: Arunachal Pradesh, Assam, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, Uttarakhand)
- Supply type: Intra-state only (no interstate sales)
- Business nature: Manufacturers, traders, or restaurants (no alcohol)
- No e-commerce: Cannot sell through Amazon, Flipkart, etc.
- Not excluded: No ice cream/pan masala manufacturing
Composition Scheme for Restaurants: Special Rules
Restaurants have unique provisions under the composition scheme for restaurants. Here are the specific rules for restaurant owners in 2025:
GST Composition Scheme Rules for Restaurants
| Rule | Details |
|---|---|
| Tax Rate | 5% (2.5% CGST + 2.5% SGST) on turnover |
| Alcohol Service | NOT allowed - restaurants serving alcohol are ineligible |
| Turnover Limit | Up to Rs.1.5 crore annual turnover |
| Invoice Type | Must issue Bill of Supply (not tax invoice) |
| ITC | Cannot claim input tax credit on purchases |
| Supplies | Only intra-state supplies allowed |
| Return Filing | Quarterly GSTR-4 (not monthly) |
Important for restaurant owners: If your restaurant has both food service and alcohol sales, you CANNOT opt for composition scheme. You must register under regular GST scheme. Many restaurants create separate entities for food and alcohol to manage this.
Composition vs Regular Scheme: Key Differences
| Feature | Regular | Composition |
|---|---|---|
| Tax Rate | 5-28% | 1-6% |
| Filing | Monthly | Quarterly |
| ITC | Allowed | Not allowed |
| Interstate | Yes | No |
| E-commerce | Yes | No |
| Software | Required (Tally) | Optional |
| Invoice Format | Tax Invoice | Bill of Supply |
GSTR-4 Due Dates for FY 2025-26
| Quarter | Period | Due Date | Status |
|---|---|---|---|
| Q1 | Apr-Jun 2025 | 18 Jul 2025 | EXPIRED (73 days overdue) |
| Q2 | Jul-Sep 2025 | 18 Oct 2025 | DUE SOON! (19 days left) |
| Q3 | Oct-Dec 2025 | 18 Jan 2026 | Upcoming (111 days) |
| Q4 | Jan-Mar 2026 | 18 Apr 2026 | Upcoming (202 days) |
GSTR-4 Late Fee Calculator
💸 Calculate Your Late Fee
Late Fee Structure
- Rs.50/day CGST + Rs.50/day SGST = Rs.100/day total
- Maximum cap: Rs.5,000 (taxable) or Rs.1,000 (NIL)
- Starts from day after due date
How to File GSTR-4 Online (Step-by-Step)
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Login to GST PortalVisit www.gst.gov.in, enter GSTIN, password & complete OTP verification
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Navigate to GSTR-4Services → Returns → Returns Dashboard → Select FY & Quarter → Prepare Online
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Fill TablesTable 4A: Purchases | Table 4B: Reverse charge | Table 5: Tax liability | Table 7: Payment
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Preview & SubmitSave → Preview → Submit using DSC/EVC → Download acknowledgment
Pro Tip: Maintain updated sales/purchase registers throughout the quarter for quick filing. Check our PAN extraction tool for vendor verification.
GSTR-4 Compliance Checklist (Free PDF)
Pre-Filing Checklist
Eligibility Verification (Annual)
- Turnover under Rs.1.5Cr (75L for special states)
- No interstate/e-commerce sales
- Form GST CMP-02 filed
Quarterly Tasks
- Daily sales register maintained
- Purchase register updated
- Bill of Supply issued (not tax invoice)
- Reverse charge items identified
Documents Required
- GST certificate
- Previous GSTR-4 acknowledgment
- Sales/purchase registers
- Bank statements
- Form GST CMP-08 (tax challan)
Composition Bill Format Requirements
- Document name: "Bill of Supply" (NOT "Tax Invoice")
- Mandatory statement: "Composition taxable person, not eligible to collect tax on supplies"
- No GST breakup: Do not show CGST/SGST separately
- Serial numbering: Consecutive bill numbers required
- GSTIN display: Your composition GSTIN must be visible
Composition Bill Format Tip: Your bill of supply should clearly state you're a composition dealer. Customers cannot claim ITC on purchases from you, so transparency is crucial.
Historical Context: 2022 GSTR-4 Late Fee Waiver
In May 2022, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 07/2022 (dated 26 May 2022), which provided relief by waiving late fees on GSTR-4 filing for FY 2021-22 if filed during 1 May 2022 to 30 June 2022.
What Was Waived?
- Period covered: FY 2021-22 (April 2021 to March 2022)
- Waiver window: Returns filed between 1 May to 30 June 2022
- Benefit: Complete waiver of late fees (both CGST and SGST)
Official Notification: Download from eGazette Portal
Purpose of the Waiver
This waiver was introduced to provide relief to composition scheme taxpayers who faced difficulties filing timely returns during the COVID-19 pandemic period. It was a one-time relief measure for FY 2021-22.
Will GST Department Refund Late Fees Already Paid?
One of the most common questions after the 2022 waiver was: "I paid late fees between 1-25 May 2022 (before the notification date). Will I get a refund?"
The Answer: NO
As of September 2025, no official clarification or refund mechanism has been issued by the GST Department for late fees paid before 26 May 2022.
Why Refunds Are Unlikely
- No historical precedent: Past late fee waivers have never resulted in retrospective refunds.
- No refund application process: The GST portal has no mechanism to apply for late fee refunds.
- Waiver vs refund distinction: A waiver means "not required to pay going forward." A refund means "return of money already paid."
- No subsequent clarifications: Despite taxpayer queries, CBIC has not issued follow-up notifications.
Key Lesson: Monitor GST Council meeting updates regularly. Sometimes waivers are announced during compliance amnesty windows.
Frequently Asked Questions About GSTR-4
What is the due date for GSTR-4 filing?
GSTR-4 must be filed by the 18th of the month following the end of each quarter. Q1 (Apr-Jun) by 18 July, Q2 (Jul-Sep) by 18 October, Q3 (Oct-Dec) by 18 January, Q4 (Jan-Mar) by 18 April.
What is the composition scheme under GST for services?
Service providers under composition scheme pay 6% GST (3% CGST + 3% SGST) on turnover. They cannot claim ITC, make interstate supplies, and must have turnover below Rs.50 lakh. Restaurants pay 5%.
What is the GST composition scheme turnover limit?
The turnover limit is Rs.1.5 crore for regular states and Rs.75 lakh for special category states. Service providers have a separate limit of Rs.50 lakh.
What is the composition scheme under GST rate?
Tax rates: Manufacturers/Traders: 1% (0.5% CGST + 0.5% SGST), Restaurants: 5% (2.5% CGST + 2.5% SGST), Service Providers: 6% (3% CGST + 3% SGST).
What are the GST composition scheme rules for restaurants?
Restaurants pay 5% GST on turnover, cannot serve alcohol, cannot claim ITC, must make only intra-state supplies, turnover must be below Rs.1.5 crore, and must issue Bill of Supply.
What is a composition dealer?
A composition dealer is a taxpayer who has opted for the simplified composition scheme under GST. They pay lower fixed tax rates on turnover but cannot claim input tax credit or make interstate sales.
Can I file GSTR-4 if I have NIL turnover?
Yes, filing is mandatory even with zero turnover. You must file a NIL GSTR-4 return. Non-filing can lead to late fees up to Rs.1,000 and GST registration suspension.
What is the difference between composition scheme and regular scheme?
Composition: Lower tax (1-6%), quarterly filing, no ITC, only intra-state. Regular: Higher tax (5-28%), monthly filing, ITC allowed, interstate sales permitted.
What is the composition bill format?
Composition dealers must issue a Bill of Supply (not tax invoice) with the statement: "Composition taxable person, not eligible to collect tax on supplies." Do not show CGST/SGST breakup separately.
What happens if turnover exceeds Rs.1.5 crore during the year?
You must immediately switch to regular scheme by filing Form GST CMP-04 within 7 days of crossing the threshold. You'll then charge regular GST rates and can claim ITC.
How to withdraw from composition scheme?
To withdraw from composition scheme, file Form GST CMP-04 on the GST portal. Withdrawal can be done at the start of any financial year or immediately if you become ineligible (exceed turnover, start interstate sales, etc.). Once withdrawn, you switch to regular GST scheme.
Can I claim ITC under composition scheme?
No. Composition scheme taxpayers cannot claim input tax credit on purchases. GST paid on inputs becomes part of your cost. This is the trade-off for lower tax rates.
Is Form GSTR-4 annual or quarterly?
GSTR-4 is a quarterly return (filed 4 times per year). There is also GSTR-4A (annual return) for composition dealers, but the main requirement is quarterly GSTR-4.
Can composition dealers make interstate sales?
No. Composition scheme is strictly for intra-state supplies only. Even one interstate sale makes you ineligible. You must register under regular GST scheme for interstate sales.
What is the late fee for GSTR-4?
Late fee is Rs.100 per day (Rs.50 CGST + Rs.50 SGST) from the day after due date. Maximum cap: Rs.5,000 for taxable returns or Rs.1,000 for NIL returns.
Can I sell on Amazon/Flipkart under composition scheme?
No. E-commerce operators require TCS collection, which is incompatible with composition scheme. To sell on e-commerce platforms, you must register under regular GST scheme.
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Final Thoughts
GSTR-4 filing is straightforward when you maintain proper records and file on time. The composition scheme reduces compliance burden significantly, but timely filing remains crucial. Use the calculators and checklist provided to ensure error-free filing.
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