A document which furnishes all the purchases, sales, tax paid on purchases, and tax collected on sales and other related details is called the GST Return. GSTR-4 is the return for composition dealers, under composition scheme offered under the GST regime for certain types of taxpayers. Dealers are required to pay tax in a quarterly statement CMP-08 by 18th of the month after the end of the quarter. Also, a dealer opting for the composition scheme is required to furnish only 1 return which is GSTR 4 once in a year by 30th of April of next financial year.

Unlike a normal taxpayer, composition dealers do not have to maintain detailed records of all their financial transactions. They must issue bills of supply and not tax invoices, as the dealer pays the tax out of their pocket. Such dealers cannot claim any input tax credit and they have to pay tax at normal rates for transactions under the Reverse charge mechanism.

Businesses whose turnover is below Rs 1.5 crore in a year can opt for composition scheme. In case of North-Eastern states and Himachal Pradesh, the limit is Rs 75 lakh. The businesses must consider the turnover of all businesses that use the same PAN card in calculating the total annual turnover.

The following individuals cannot opt for the Composition Scheme under the GST regime: 1. Manufacturers of ice cream, tobacco and pan masala 2. Individuals making inter-state supplies 3. Casual taxpayer OR Non-resident taxpayer 4. Businesses that use an e-commerce operator to supply goods