Quaterly Return For Registered Person Opting For Composition Levy

Goods and Services Tax has transformed the way of doing business for small and medium businesses. Businesses who were not at all complying to any tax provision are now reqiuired to file three monthly returns online. Incase of composition dealers this number is reduced to a single return in a quarter. Most of the small retailers have opted for composition scheme as there buyer has no requirement of Input Tax Credit.

In this article we will discuss about return filing requirement for businesses registered under composition scheme of Goods and Services Tax law.

Return Filing Requirement of a Composition Dealer



A taxpayer registered under composition scheme is required to furnish GSTR-4 between 11th-18th of subsequent quarter. So if we talk about July-September quarter,  the taxpayer has to file GSTR-4 between 11th-18th of October. Most of the details are similar to the details that needs to be furnished by a normal tax payer, except that details of input credit is not required, since a composition dealer is not allowed any input tax predit from inward purchases.Below we have provided various sections wherein a taxpayer is required to furnish information. Taxpayer’s business details will auto-populate by default.

Below we have provided various sections wherein a taxpayer is required to furnish information. Taxpayer’s business details will auto-populate by default.

  • Inward Supplies Including Supplies on Which Tax is Paid on Reverse Charge Basis:

    Under this head, composition dealer is required to provide details of inward supplies from registered and unregistered taxpayer. Purchases from unregistered dealers exceeding Rs. 5000 will attract GST on reverse charge basis and a compositin dealer is required to pay tax on such purchases/payments as well. Those details will also fall under this head.

  • Amendments to Details of Inward Supplies:

    Any kind of purchase returs or modification in inward supplies of previous period will be corrected by furnishing details in this section. For the first quarter of october, this section is not applicable as this will be first composition return under GST regime.

Frequently Asked Questions on Composition Scheme

The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 75 lakhs ( Rs. 50 lakhs in case of few States). The objective of composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax at normal rate.

S. No. Category of Registered person Rate of Tax
1 Manufacturers, other than manufacturers of such goods as may be notified by the Government (Ice cream, Pan Masala, Tobbacco prodcuts etc.) 2% ( 1% Central tax plus 1% State tax) of the turnover
2 Restaurant Services 5% ( 2.5% Central tax plus 2.5% SGST) of the turnover
3 Traders or any other supplier eligible for composition levy 1% ( 0.5% Central tax plus 0.5% State tax) of the turnover

Composition scheme is a scheme for payment of GST available to small taxpayers whose aggregate turnover in the preceding financial year did not cross Rs. 75 lakhs. In the case of the following States, the limit of turnover is Rs. 50 lakhs:-

a) Arunachal Pradesh

b) Assam

c) Manipur

d) Meghalaya

e) Mizoram

f) Nagaland

g) Sikkim

h) Tripura

i) Himachal Pradesh

A person opting for composition levy will have to pay tax on quarterly basis before 18th of the month succeeding the quarter during which the supplies were made.

Aggregate turnover will be computed on the basis of turnover on an all India basis and will include value of all taxable supplies, exempt supplies and exports made by all persons with same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.

No. He can issue a bill of supply in lieu of tax invoice.

Read more on Goods and Services Tax.