GSTR 4: Complete Guide for 2025

The Goods and Services Tax regime in India has revolutionised the way indirect taxes are filed and calculated for businesses, especially for small traders and service providers. One key return in the GST ecosystem tailored for small taxpayers who opt for the Composition Scheme is GSTR 4. In 2025, with evolving regulations and improved digital systems, understanding GSTR 4, its filing process, and implications is more important than ever.

What is GSTR 4 and Who Should File It?

GSTR 4 is the annual GST return form that needs to be filed by taxpayers registered under the GST Composition Scheme. This scheme is designed for small businesses with an annual turnover up to Rs 1.5 crore, offering them simpler compliance and lower tax rates. GSTR 4 captures details of outward supplies, tax paid, and other particulars needed by the government for the financial year.

Who is eligible to file GSTR 4 in 2025?

Any taxpayer enrolled under the Composition Scheme, including traders, manufacturers, and restaurants, must submit GSTR 4 annually. These taxpayers pay tax at a fixed percentage of their turnover and follow less stringent GST formalities.

First hand experience:
Many small shopkeepers and service providers across Indian cities, like Agra and Kochi, find GSTR 4 beneficial. By switching to the Composition Scheme, they spend less time on GST calculations and paperwork, focusing more on business growth.

Key Features and Changes in GSTR 4 (2025 Highlights)

• GSTR 4 is now a single annual return, replacing previous quarterly filings.
• Compulsory online filing through the GST portal, making the process paperless.
• Details required include summary of outwards supplies, Inward supplies from unregistered dealers, tax paid, and amendments.
• Auto-populated data for some sections, reducing manual efforts.
• Simplified payment method with the latest PMT 06 challan.

Expert insight:
Did you know? A GST composition dealer cannot claim input tax credit or collect tax from customers, keeping compliance easy.

What are the main benefits of moving to GSTR 4 for small businesses?

• Less compliance load: Just one form annually.
• Lower tax rates: Static tax rates (1% for traders, 5% for restaurants, 6% for service providers).
• **No tax invoice: ** Bills of supply suffice, reducing formalities.

How to File GSTR 4 Online in 2025?

Filing GSTR 4 has become more systematic and digital friendly now. Here is a stepwise approach:

What are the steps for filing GSTR 4 in 2025?

1. Log in to the GST portal with your credentials.
2. Navigate to ‘Returns Dashboard’ and select Annual Return – GSTR 4.
3. Download and fill in the auto-drafted form using information for the financial year.
4. Validate the filled sections – Outward supplies, Inward supplies, tax paid, late fee, amendments.
5. Preview the form and rectify any errors.
6. Pay the necessary tax using the PMT 06 challan (if required).
7. Submit the return and undertake final verification through OTP or DSC.

Expert insight:
GSTR 4 online filing is often completed within a single sitting, particularly with accurate bookkeeping. Many businesses use popular GST software integrated with the portal for faster filings.

Is there a penalty for late filing of GSTR 4?

Yes, late filing attracts a penalty of Rs 50 per day (Rs 25 each for CGST and SGST) up to a maximum of Rs 2000 per return.

People also ask:
Q: Can I revise GSTR 4 after submitting it?
A: No, GSTR 4 once filed cannot be revised. Careful review before submission is necessary.

GSTR 4 vs Other GST Returns: How is it Different?

Comparison with other GST filing forms can clear confusion, especially for small enterprises.

Did you know?
The number of GST returns for small businesses dropped significantly after GSTR 4 moved to annual filing in 2020, saving close to 32 working days in a year.

What are the pros and cons of opting for the Composition Scheme and GSTR 4?

Pros:

• Minimal paperwork and easy compliance
• Lower, fixed tax rates
• No tax invoice required

Cons:

• No credit for input tax
• Not permitted to supply interstate or through e-commerce
• Cannot collect GST from customers

Documents and Information Needed for GSTR 4 Filing

Having the right set of documents and data ready makes GSTR 4 compliance smooth.

Documents to keep:

• Summary of all business sales and purchases
• Inward supplies from unregistered dealers
• Details of taxes paid and bills of supply
• Modifications or amendments, if any

People also ask:
Q: What is the due date for GSTR 4 in 2025?
A: Generally, GSTR 4 must be filed by 30th April after the financial year ends. Extensions are rare.

Common Mistakes and How to Avoid Them While Filing GSTR 4

To prevent penalties or legal disputes, taxpayers should avoid typical errors during filing.

What errors do most businesses make with GSTR 4?

• Entering wrong turnover details
• Omitting tax paid or misclassifying supply
• Missing amendment entries
• Delay in filing leading to late fees

How to avoid mistakes:

• Cross verify sales records and supply bills.
• Use GST accounting software verified for 2025 norms.
• Seek help from registered GST practitioners or Chartered Accountants for reviews.

Expert insight:
Experts recommend setting reminders and using mobile-friendly GST apps to avoid missing deadlines.

Real Life Experiences: How GSTR 4 Makes Business Simple

How does GSTR 4 impact daily business operations for SMEs and traders?

Local Kirana shop owners in Jaipur and Bangalore share that, prior to the Composition Scheme, their evenings were spent tallying invoices and calculating taxes. After migrating to GSTR 4, they now use that time to engage more with customers and plan inventory, as GST compliance takes just a weekend now.

Technology Platforms for GSTR 4 Filing in 2025

As GST compliance becomes digital, online marketplaces and software tools offer seamless experiences.

TL;DR – Quick Recap

• GSTR 4 is an annual return for compositional taxpayers with turnover up to Rs 1.5 crore.
• Can be filed entirely online, using GST portal or GST compliance tools.
• Not eligible for input tax credit or inter state sales.
• Low compliance, but strict deadlines and penalties for delays.
• Always cross check supplied data, use expert support if needed.

People Also Ask: FAQ on GSTR 4

Q: Can a taxpayer switch from the Composition Scheme to regular GST during the year?
A: Yes, but they must file CMP 04 for withdrawal and start filing GSTR 3B etc. from the next month.

Q: What happens if I forget to file GSTR 4 in time?
A: Late fees apply, and your GST registration may get suspended if continued noncompliance occurs.

Q: Is paying GST through PMT 06 challan enough for compliance?
A: No, you must also submit GSTR 4. Payment and return submission both are required.

Q: Can businesses having e-commerce sales file GSTR 4?
A: No, those supplying through online marketplaces or selling outside their home state cannot opt for the Composition Scheme and thus GSTR 4.

Did you know?
GSTR 4 compliance is now a key criterion for bank loan approvals and government tenders for small businesses.

For more on official guidelines and step by step instructions for 2025, visit the GST government portal.

Source:
Central Board of Indirect Taxes & Customs, India https://www.cbic.gov.in/