How to File GST Composition Return Online?

Who Can Opt for Composition Scheme?

Taxpayers having a turnover of less than Rs.1.5 crores can opt for the composition scheme. In the case of Northeastern States and Himachal Pradesh this limit is Rs.75 lakhs. A composition dealer can also engage in supply of services upto 10% of turnover or Rs.5 lakhs, whichever is higher.

Who Cannot Opt for Composition Scheme?

Given below is a list of the people who can’t opt for a composition scheme -

• Ice cream, PAN masala, and tobacco manufacturers.
• A person involved in making interstate supplies.
• A non-resident taxable person or a casual taxable person.
• Individuals providing services through an e-commerce operator responsible for collecting TCS under CGST Section 52.
• Manufacturers of goods or service providers specified by the Government based on GST Council recommendations.

What are the Conditions for Availing Composition Scheme?

• Dealers opting for the composition scheme cannot claim Input Tax Credit.
• Dealers cannot supply goods exempt from GST, such as alcohol.
• Taxpayers must pay tax at normal rates for transactions under the Reverse Charge Mechanism.
• Taxable persons with multiple business segments (e.g., textiles, electronics, groceries) under the same PAN must register all businesses under the scheme collectively or opt out.
• Taxpayers must display the phrase ‘composition taxable person’ prominently on all notices and signboards at their business premises.
• Taxpayers must include the phrase ‘composition taxable person’ on every bill of supply they issue.
• Under the CGST (Amendment) Act, 2018, manufacturers and traders can supply services up to 10% of turnover or ₹5 lakhs, whichever is higher. This amendment applies from February 1, 2019.

How Can a Taxpayer Opt for Composition Scheme?

To opt for the Composition Scheme, taxpayers must file GST CMP-02 online through the GST Portal. This intimation should be submitted at the start of each financial year by dealers choosing the Composition Scheme.

GST Rates Under Composition Scheme

How Should a Composition Dealer Make GST Payment?

Composition dealers must pay GST out of pocket for the supplies they make. The GST payment includes:

1. GST on supplies made.
2. Tax under the reverse charge mechanism.
3. Tax on purchases from unregistered dealers

What is the GST Return Under Composition Scheme?

For people who have opted for the GST composition scheme, filing gets easier. GST composition dealers are required to file just one quarterly return in form GSTR-4 and one annual return in form GSTR-9A. Upon registering for the composition scheme under GST, taxpayers are liable to pay 1% to 6% of tax on their turnover.

How to File Composition GST Return GSTR-4?

Given below are the steps to file GSTR-4 on the GST portal -

• Step 1. Login to the GST Portal and click on Services > Returns > Annual Returns from the top menu bar.
• Step 2. Next, on the ‘File annual returns’ page, select the relevant financial year for which you are filing the GSTR-4.
• Step 3. Read all the instructions given on the ‘File returns’ page carefully. On the Annual Return GSTR-4 tile, click on the ‘Prepare Online’ button.
• Step 4. Enter the aggregate turnover in the previous year and click on the ‘SAVE’ button. In case there was no turnover in the previous year, then enter Zero in the field for turnover. Make sure not to leave it blank. A message is displayed saying that the data was saved successfully.
• Step 5. In order to file a nil GSTR, simply click on the ‘file a nil GST return’ check box and then click on ‘Proceed to File.’ In this way, you can go directly to steps 7 and 9.
  Note: You can skip step 5 if you are not filing a nil GSTR.
• Step 6. Every time, select the tables for which you want to add/view the details from the drop-down menu and click on the ‘Back’ button. Enter the details of the various tables of GSTR-4 as explained below -
  Table 4A - It consists of inward supplies from registered suppliers.
  It contains the GSTIN-wise details of purchases from the GST-registered suppliers. Add the GSTIN, as it helps auto-populate the place of supply and legal name, and click on ‘+’ for every new entry.
  Under the item details field, enter the taxable value and choose the GST rate. mandatorily.
  Table 4B - It covers the inward supplies from a registered supplier (reverse charge mechanism). GSTIN-wise details of purchases from suppliers subject to reverse charge mechanism and registered under GST. Now, add the GSTIN on the basis of which the system auto-populates the legal name and the place of supply, and click on the + button.
  Table 4C - It covers inward supplies from unregistered suppliers. Enter the PAN-wise details of the purchases from unregistered suppliers. Entering PAN is not mandatory. Therefore, you can also enter the legal name of the supplier. Select the checkbox if a reverse charge is applicable. Also, select the ‘Supply type’ as inter-state or intra-state.
  Table 4D - It covers the import of service. It consists of the details of the services imported on which IGST has already been paid. Click on the + button to add items. Enter the taxable value, GST rate, and the place of supply.
  Table 5 - Table 5 presents the summary of the CMP-08 form. It consists of an auto-drafted summary filed for all 4 quarters of the financial year.
  Table 6 - It consists of the outward and inward supplies attracting reverse charge based on tax rates. The user needs to input the sales values in rows 12 to 16 of a predefined table based on the applicable GST rates (0%, 1%, 2%, 5%, or 6%) for a composition taxpayer. These values should be the net amount after considering advances, credit/debit notes, and adjustments due to amendments.
  The inward supplies attracting reverse charge, as shown in tables 4A, 4B, and 4C, do not get displayed in rows 1-11.
  Table 7. It views TDS/RCS credit received. This table is auto-drafted based on the GSTIN details of the TCS/TDS credit received during the year. This information cannot be edited.
• Step 7. In the next step, you can view the saved return by clicking on the ‘Proceed to file’ option. The return status will change to ‘Ready to file as on (date).’
  Either click on ‘download GSTR-4 summary’ or download GSTR-4 (excel) to save a copy of the return for your record.
• Step 8. Make any late fee, tax, or interest payments displayed in Table 8. You can either pay by creating a challan if the cash in the electronic ledger is not sufficient for part/full payment. Select NEFT/RTGS as the desired mode of payment and generate a challan after payment.
  You can also make the payment through the electronic cash ledger if it has sufficient balance for payment. The cash is automatically adjusted from your ledger for the tax payment automatically. Either click on the download GSTR-4 summary (PDF) button or download the GSTR-4 summary (excel) to review the GSTR-4 and proceed further.
• Step 9. Now, in the last step, file the GSTR-4 return using the EVC or DSC. At the bottom of the tax payment page, select the declaration checkbox and the authorized signatory. Then, select the ‘File GSTR-4’ button. Confirm your submission by clicking Yes on the warning message and either click on ‘File with EVC’ or ‘File with DSC’ button on the ‘File return’ page.

How to File GSTR-9A Annual Return for Composition Dealers?

GSTR-9A is the annual GST return that is required to be filed by the GST composition taxpayers. Here is a step-by-step guide on how to file GSTR-9A online on the GST portal -

• Step 1: Log in to the GST Portal. Go to the ‘Services’ tab, click on ‘Returns,’ and then select ‘Annual Return.’ On the ‘File Annual Returns’ page, choose the relevant financial year. A pop-up message will outline the steps for online/offline filing. Click ‘Prepare Online.’
• Step 2: Indicate whether you want to file a Nil return for the financial year. Select ‘Yes’ only if all the following conditions are met:
  • No outward supply.
  • No receipt of goods/services (purchases).
  • No other liabilities.
  • No credit claimed.
  • No refunds claimed.
  • No demand order received.
  • No late fees payable.
  If filing a Nil return, provide turnover details, compute late fees (if any), and proceed. If not filing a Nil return, proceed to the ‘GSTR-9A Annual Return for Composition Taxpayers’ page.
• Step 3: Enter Details in Various Sections
  • Details of Outward Supplies:
    Click on the ‘Details of Outward Supplies’ tile, details from GSTR-4 will be auto-populated. Enter turnover details. Significant deviations will prompt a confirmation message. Save the changes and return to the dashboard.
  • Update details for the following tiles:
    • Inward supplies under reverse charge.
    • Other inward supplies.
    • Tax paid.
    • Transactions from the previous year reported in current returns.
    • Differential tax for such transactions.
    • Demands/refunds.
    • Credit reversed/availed.
• Step 4: Preview Draft GSTR-9A
  • Click ‘Preview GSTR-9A (PDF)’ or ‘Preview GSTR-9A (Excel)’ on the dashboard.
  • Review the draft thoroughly and make necessary corrections.
• Step 5: Click ‘Compute Liabilities’ to process all details. Calculate the late fees, if applicable. Pay late fees through the electronic cash ledger or create a payment challan for additional payments.
• Step 6: Re-preview the draft in PDF/Excel format and verify the details, including late fees paid.
• Step 7: File GSTR-9A
  • Select the declaration checkbox and choose the ‘Authorized Signatory.’
  • Click ‘File GSTR-9A.’
  • File with DSC: Upload the certificate, sign, and submit.
  • File with EVC: Enter the OTP sent to your registered email and mobile number.
  Upon successful validation, the return status will change to ‘Filed.’

Understanding GST filing is crucial for businesses. However, GST is a complex law and consists of a lot of provisions. Having said that, it is also common to have a lot of queries concerning the same. Therefore, you must consider seeking consultation from tax experts regarding your GST-related problems. Staying informed and compliant can help propel your business forward with tailored expertise. Whether you need help with GST return filing or have any GST-related query, our experts have got your back. Book an online CA now!