GST Return Filing - Composition Scheme

The GST Composition Scheme is designed to ease the compliance burden for MSME businesses by simplifying GST return filings and GST payment mechanisms. In this article, we look at the GST return filing for Composition Scheme in detail.

Composition Scheme Return Filing

All persons registered under the Composition Scheme shall file FORM GSTR-4A every quarter through the GST Common Portal or through a GST Facilitation Centre. GST return for those enrolled under Composition Scheme is due on the 18th of the month, succeeding a quarter. Hence, GST return for composition scheme would be due on April 18th, July 18th, October 18th and January 18th. The GST return filed by a Composition Scheme supplier must include details of:

Invoice-wise inter-State and intra-State inward supplies received from registered and unregistered persons.
Consolidated details of outward supplies made.

Also, if a registered person opted to pay tax under composition scheme from the beginning of a financial year, then the taxpayer must file monthly GST returns on the 10th, 15th and 20th of each month and monthly returns till the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier. Hence, even if a taxable person under GST opted for composition scheme from April onwards, the taxpayer must continue filing monthly GST returns until September.

Know more about due dates for filing of GST returns.

Composition Scheme - GST Payment Due Date

While filing the GST composition return, the taxpayer is also required to discharge liability towards tax, interest, penalty, fees or any other amount payable under GST by debiting the electronic cash ledger. GST composition is levied at the following rates:

Manufacturers, other than manufacturers of such goods as may be notified by the Government - 1%.
Suppliers making supplies - 2.5%
Any other supplier eligible for composition levy - 0.5%

It is important to note that any taxpayer who has opted for the GST composition scheme will not be eligible to avail

input tax credit on receipt of invoices or debit notes from the supplier for the period prior to opting for the composition scheme.

Withdrawing from GST Composition Scheme

Any taxpayer who is withdrawing from a GST Composition scheme must file FORM GST CMP-04 within seven days of the occurrence of event mandating withdrawal from GST composition scheme. Further, after filing the application for withdrawal from GST composition scheme, the taxpayer must file GST returns till the due date of furnishing the return for the quarter ending September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier.

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Frequently Asked Questions

Common questions about GST Return Filing: Composition Scheme for MSMEs.

The GST Composition Scheme is a simplified tax compliance scheme designed to reduce the compliance burden for micro, small, and medium enterprises (MSMEs). It allows eligible businesses to pay GST at a flat rate instead of the regular GST rates, and also exempts them from maintaining detailed records and filing comprehensive GST returns.

Businesses with an annual turnover up to Rs. 1.5 crore are eligible for the GST Composition Scheme. This includes manufacturers (other than those manufacturing notified goods), suppliers of goods, and service providers (except those supplying non-taxable goods or services).

Businesses enrolled under the GST Composition Scheme are required to file FORM GSTR-4A quarterly, on the 18th of the month following the end of each quarter (April 18th, July 18th, October 18th, and January 18th).

The GSTR-4A return must include invoice-wise details of inter-State and intra-State inward supplies received from registered and unregistered persons, as well as consolidated details of outward supplies made.

The tax rates under the GST Composition Scheme are as follows: 1% for manufacturers (other than manufacturers of notified goods), 2.5% for suppliers of goods, and 0.5% for other eligible suppliers.

No, businesses enrolled under the GST Composition Scheme are not eligible to claim input tax credit on invoices or debit notes received from suppliers for the period prior to opting for the scheme.

To withdraw from the GST Composition Scheme, a business must file FORM GST CMP-04 within seven days of the event mandating withdrawal. After filing the application, they must continue filing regular GST returns until the due date of furnishing the return for the quarter ending September of the succeeding financial year or furnishing of the annual return for the preceding financial year, whichever is earlier.

Yes, if a business opts for the GST Composition Scheme from the beginning of a financial year, they must file monthly GST returns until the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of the annual return for the preceding financial year, whichever is earlier.

When filing the GST composition return (GSTR-4A), businesses are required to discharge their liability towards tax, interest, penalty, fees, or any other amount payable under GST by debiting the electronic cash ledger.

Yes, businesses can simplify the GST registration and return filing process by seeking assistance from experts or service providers like IndiaFilings, who can guide them through the compliance requirements and procedures.