Due date to file GSTR-4 gets extended up to 31st October 2020

The Central Board of Indirect Taxes and Customs (CBIC) has yet again announced an extension to file the annual return in form GSTR-4. The return applies to the taxpayers registered under the composition scheme anytime from FY 2019-20. 

The due date has been extended to 31st October 2020 from 31st August 2020 for FY 2019-20. CGST notification number 64/2020 dated 31st August 2020 gives effect to the due date extension. The GST Act requires the taxpayers to file this return on or before 30th April of the year following the relevant financial year or as extended by the government from time to time.

The facility to file this return on the GST portal was first introduced on 21st July 2020. It was followed by the release of an offline tool only on 6th August 2020 to prepare a few tables of GSTR-4 without needing the internet. 

The return is relatively simple in comparison with the annual return for regular taxpayers, being GSTR-9. However, the time limit given for the composition taxpayers to familiarise with the new facility was considerably less. GSTR-4 (annual return) has four tables out of which only one table is auto-populated as per the forms CMP-08 filed during the relevant financial year.

Amidst this extension, these taxpayers are also questioning the late fee bias shown on them. Currently, the late fee continues to be levied on a composition taxpayer. It is Rs 200 per day of delay up to a maximum of Rs 5,000 for the late filing of CMP-08. Despite the late fee not shown on the system, a taxpayer is duly bound to compute and pay this fee. 

It is in contrast to the maximum late fee fixed of Rs 500 per return for all the regular taxpayers until 30th September 2020, as COVID relief measure. Few taxpayers have also questioned the need to declare purchase details mandatorily while not being allowed to claim any input tax credit.

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These details include inward supplies attracting reverse charge, inward supplies from GST unregistered persons, inward supplies from GST registered persons and import of services, mostly classified based on the tax rates and GSTIN/PAN.

A long-standing conflict pointed out by the tax professionals, which is not resolved is the existence and validity of GSTR-9A. Notified initially as an annual return for composition dealers, GSTR-9A has been waived off for the first two financial years since the implementation of GST. However, this return has not been suspended till date despite the taxman changing the frequency of filing GSTR-4 to annual. 

Another issue that haunts the taxpayers is that there is no option to revise GSTR-4 return once filed. Similar to other returns, this return cannot be amended once filed. Hence, taxpayers are hesitant to proceed, especially where there are some technical discrepancies on the GST portal while preparing the return. The tech team of GSTN needed additional time to rectify such issues.

Moreover, taxpayers must exercise caution while reporting annual turnover in the GSTR-4. Any difference in this figure with the figure declared in the income tax return could have invited trouble. Hence, an extension by two months was necessary.

The GSTR-4 return initially had to be filed every quarter along with payment of GST liability. The taxpayers faced unnecessary hassles of collating and reporting information of sales and inward supplies on reverse charge every quarter. Instead, a new and simplified challan-cum-statement in form CMP-08 was notified to fill the shoes. After that, GSTR-4 has become an annual affair since FY 2019-20.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in