Fees waived off for delay in GSTR-4

Late Fees Waived for Delay in Filing GSTR-4

CBIC permanently caps the GSTR-4 late fee at Rs. 500 for NIL returns and Rs. 2,000 for returns with tax liability (turnover up to Rs. 5 crore), and has run multiple amnesty windows that further reduced or waived fees on back-year filings. For FY 2026-27, the annual composition return falls due on 30 June 2027. The responsible approach is to file on time: amnesty windows, when announced, are short, unpredictable and cover only the fee — not the 18% interest clock running on any unpaid tax underneath.

Who Must File GSTR-4 — and When the Obligation Begins

Every registered taxpayer operating under the composition scheme (Section 10 of the CGST Act, 2017) must file GSTR-4 as an annual return. The filing obligation covers:

• Manufacturers and traders with aggregate annual turnover (in the preceding financial year) not exceeding Rs. 1.5 crore — or Rs. 75 lakh if the principal place of business is in a Special Category State (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand)
• Restaurants not serving alcoholic liquor, within the same Rs. 1.5 crore limit
• Service providers and mixed suppliers eligible under Notification 02/2019-Central Tax (Rate) with aggregate turnover up to Rs. 50 lakh — the so-called composition-lite or CGST-service-composition category

A taxpayer who opts out of, or is compulsorily withdrawn from, the composition scheme partway through the year still has to file GSTR-4 for the period they remained under the scheme. The return covers the full financial year or the partial period, as applicable.

One important boundary: composition dealers do not file GSTR-1 or GSTR-3B. Their compliance cycle runs on just two instruments — CMP-08 quarterly and GSTR-4 annually. Understanding the difference between them is the foundation of getting GSTR-4 right.

CMP-08 and GSTR-4: Two Instruments, One Compliance Cycle

The most damaging misconception among composition dealers is that CMP-08 and GSTR-4 are interchangeable. They are not — they serve entirely different functions.

CMP-08 (Statement-cum-Challan) is filed quarterly by the 18th of the month following each quarter. It captures the self-assessed tax payable and doubles as a payment challan. It contains no supply-wise detail.

GSTR-4 is the annual consolidation. It pulls the CMP-08 tax-paid figures into a single view and requires you to separately furnish:

• Table 4: Inward supplies received from registered and unregistered suppliers
• Table 4B / 4C: Inward supplies attracting Reverse Charge Mechanism (RCM) — this is the table most commonly skipped by composition dealers
• Table 6: Tax payable and tax paid (auto-populated from your four CMP-08 payments)
• Table 7: TDS/TCS credits received, if any

Paying tax diligently through CMP-08 does not discharge the GSTR-4 obligation. You can have a spotless CMP-08 record and still accrue a Rs. 50-per-day late fee on GSTR-4 for every day you fail to file the annual return. Both penalties run independently.

GSTR-4 Due Date for FY 2026-27

The statutory due date is fixed by Rule 62 of the CGST Rules, 2017: 30 June following the end of the financial year.

CBIC does occasionally extend this deadline by notification — extensions of a few weeks to a few months have occurred in earlier years. Do not plan around an extension. Historically, extensions are announced either after the due date passes or within days of it, leaving you no meaningful preparation window. Target 30 June 2027 as your hard deadline and work backwards.

Standard Late Fee Under Section 47: The Mechanics

Section 47 of the CGST Act, 2017 is the source provision for late fees. The daily rates are:

• Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST) — where the return carries a tax liability
• Rs. 20 per day (Rs. 10 CGST + Rs. 10 SGST) — where it is a NIL return (no outward supply, no net tax payable)

The fee begins accruing from the day after the due date and stops on the date you actually file. However, CBIC has notified permanent maximum caps specifically for GSTR-4 (through CGST notifications — verify the current cap notification number on cbic.gov.in):

These caps apply even without any amnesty scheme. Once accrued daily fees hit the ceiling, no further late fee accumulates — but you must still file to stop the clock, and interest under Section 50 at 18% per annum on any unpaid tax keeps running regardless of the fee cap. That interest is neither capped nor waived by amnesty notifications.

How Past CBIC Amnesty Schemes Worked

CBIC has issued GSTR-4 amnesty notifications through CGST Rate Notifications on multiple occasions since the composition scheme was restructured in 2019. The recurring pattern is:

What amnesty windows typically provide:

1. Complete waiver of late fee for NIL-return filers who file within the window
2. A reduced flat cap (often Rs. 500 per return, total, regardless of how many years elapsed) for returns with tax liability — significantly below the standard Rs. 2,000 cap
3. Eligibility to clear multiple back years in a single window — useful for dealers who fell off the compliance radar entirely
4. No relief on interest — Section 50 interest on unpaid tax must still be paid in full

What amnesty windows do not do:

• They are not automatic. The fee is not waived unless you physically file the return within the notified window.
• They do not condone the underlying tax liability or any penalty under Section 122 for suppression or mis-statement.
• They do not restore a cancelled GST registration — that requires a separate Section 30 restoration application.

Windows are typically 60–90 days. Missing them means the standard cap applies from the day after the window closes. CBIC is under no statutory obligation to run these schemes at regular intervals; they reflect GST Council recommendations, which are themselves discretionary.

For FY 2026-27, no amnesty window has been announced as of this article's date. Monitor the CBIC website (cbic.gov.in) and the news/updates section of the GST portal (gst.gov.in) for new notifications.

Worked Examples: Calculating Your Actual Late Fee

Example A — NIL return, long delay

Raj Traders, a dormant kirana in Pune opted for composition but had no outward supplies in FY 2025-26. GSTR-4 was due 30 June 2026. He filed on 27 January 2027 — 211 days late.

• Daily fee applicable (NIL return): Rs. 20/day
• Raw accrued fee: 211 × Rs. 20 = Rs. 4,220
• Permanent NIL-return cap: Rs. 500
• Late fee actually payable: Rs. 500 (Rs. 250 CGST + Rs. 250 SGST)

The fee is modest. But Raj's GST registration has been flagged for non-filing for over six months — enough to invite a Section 29 cancellation notice. The Rs. 500 is the least of his problems.

Example B — Active dealer with tax liability, no amnesty available

Priya's Kitchen, a restaurant in Indore (no alcohol), had turnover of Rs. 28 lakh in FY 2025-26 and paid Rs. 1,40,000 in composition tax through CMP-08. GSTR-4 was due 30 June 2026. She filed on 15 December 2026 — 168 days late.

• Daily fee applicable (tax payable): Rs. 50/day
• Raw accrued fee: 168 × Rs. 50 = Rs. 8,400
• Permanent cap (turnover ≤ Rs. 5 crore): Rs. 2,000
• Late fee actually payable: Rs. 2,000 (Rs. 1,000 CGST + Rs. 1,000 SGST)
• Interest on CMP-08 shortfall (if any): 18% p.a. from the quarterly due date — not capped

Even if an amnesty window had been available covering FY 2025-26, the effective fee for Priya would still be the same Rs. 2,000 cap (or possibly Rs. 500 under a generous amnesty notification). The real benefit of amnesty arises in the multi-year default scenario below.

Example C — Multi-year default, amnesty window available

Deepak Auto Parts, a composition dealer in Jaipur, never filed GSTR-4 for FY 2020-21 through FY 2023-24 (four years). He has tax liability in each year. CBIC announces a hypothetical amnesty capping fees at Rs. 500 per return for all pending years.

The Rs. 6,000 saving is real but secondary. The primary value of Deepak filing all four returns in the amnesty window is clearing the registration blockage and stopping the Section 29 cancellation process in its tracks.

How to File GSTR-4 on the GST Portal: Step by Step

1. Log in at gst.gov.in with your GSTIN credentials
2. Go to Returns → Annual Return → GSTR-4
3. Select the relevant financial year (e.g., 2026-27)
4. Click Prepare Online — the system auto-populates Table 6 (tax paid) from your CMP-08 history. Verify each quarter's figures against your payment receipts
5. Enter Table 4 — inward supplies, GSTIN-wise from registered suppliers. For unregistered purchases, use the dedicated sub-table. Keep your purchase register open alongside
6. Enter Table 4B — inward supplies attracting RCM. If you paid GTA freight, engaged an individual advocate, or imported services, the RCM liability belongs here. Ensure the corresponding tax has been paid through the Electronic Cash Ledger before filing
7. Enter Table 7 — TDS/TCS credits, if any were deducted by your buyers
8. Review the late fee computed by the portal in the fee section. If an amnesty cap is in force, the portal should reflect the reduced amount — cross-check the notification number before paying
9. Pay any outstanding late fee by debiting your Electronic Cash Ledger. If your ledger balance is insufficient, pay through Challan No. PMT-06 before proceeding
10. Use the Preview (PDF) option to review the complete return before submission
11. File using DSC or EVC (Electronic Verification Code via OTP on the registered mobile number). Proprietors and individual partners typically use EVC; companies need DSC
12. Download the ARN (Acknowledgement Reference Number) confirmation immediately. Store it — this is your proof of compliance

If the portal rejects a supplier's GSTIN in Table 4, check the supplier's registration status on the portal. A cancelled or surrendered GSTIN will generate an error. Shift those entries to the unregistered supplier sub-table or raise a query through your CA.

Common Mistakes Composition Dealers Make on GSTR-4

Treating CMP-08 as a substitute for GSTR-4

The single most frequent error. Four filed CMP-08 statements and four tax payments do not close the GSTR-4 obligation. The annual return is a separate statutory filing with its own penalty structure.

Skipping RCM entries in Table 4B

Composition dealers who freight goods via a GTA or engage an individual advocate for legal services are liable to pay GST under Reverse Charge. Skipping Table 4B creates a data mismatch that Section 61 scrutiny notices pick up routinely.

Treating turnover limits as a once-a-year check

The composition eligibility threshold is assessed on aggregate turnover in the preceding financial year. If your turnover crossed Rs. 1.5 crore in FY 2025-26, you are ineligible for composition from 1 April 2026 onward — whether or not you have filed GSTR-4 for 2025-26. File Form GST CMP-04 to opt out and switch immediately to the regular scheme.

Waiting for an amnesty that may not arrive

Amnesty is discretionary. Planning compliance around the assumption of future relief is a risk management failure. CBIC's recent approach has been to tighten rather than loosen amnesty generosity with each successive scheme.

Maintaining no HSN-level purchase records

GSTR-4 requires HSN-wise inward supply data. Dealers who record purchases in lump-sum ledger entries without HSN codes cannot complete Table 4 accurately. Start maintaining purchase registers with HSN from the first invoice of FY 2026-27.

Misallocating the late fee between CGST and SGST

The cap is split equally between the two heads. An incorrect allocation (e.g., paying the full Rs. 2,000 to CGST) results in a debit under one head and an uncleared liability under the other, causing a reconciliation mismatch on the portal.

Consequences of Not Filing GSTR-4

Non-filing is not a passive or victimless state. Its consequences stack up:

• Late fee accrual continues from the due date until filing — capped, but a real cash liability on the books
• Interest at 18% per annum under Section 50 on any tax that was not paid through CMP-08 — this runs from the original quarterly due date and is neither capped nor waived by amnesty
• Section 29(2) cancellation proceedings: Persistent non-filing (typically two successive financial years) gives the proper officer grounds to initiate cancellation of the GST registration. Once a cancellation notice is issued, the dealer must respond within the prescribed period or face ex-parte cancellation
• Block on portal activity: A pending GSTR-4 generates compliance flags that affect the dealer's profile and can prevent registration amendments on the portal
• Downstream buyer exposure: Where a buyer has recorded purchases from a composition dealer and the dealer's non-filing triggers an audit query, it creates disputes over input credit eligibility (even though composition dealers do not charge GST on outward supplies, the audit narrative around non-compliance contaminates the relationship)
• Tender and vendor empanelment disqualification: Government procurement portals and many large private buyers cross-check GST compliance status. Non-filed annual returns are visible in the public-domain GSTIN profile

Key Takeaways

• GSTR-4 for FY 2026-27 is due by 30 June 2027. Mark this in your compliance calendar from day one of the financial year. Do not rely on an extension notification.
• CMP-08 and GSTR-4 are independent obligations with separate penalties. Paying composition tax quarterly through CMP-08 does not satisfy the annual return requirement.
• Late fee is permanently capped at Rs. 500 (NIL returns) or Rs. 2,000 (tax-payable returns, turnover ≤ Rs. 5 crore) — even without any amnesty scheme in force. You will never owe more than these amounts in late fee alone for GSTR-4.
• Interest under Section 50 at 18% p.a. is not capped and not covered by amnesty. If CMP-08 payments were short, interest is a separate, compounding liability.
• RCM in Table 4B is mandatory even for composition dealers. GTA payments, advocate fees and similar RCM-category expenses must be declared and the tax paid before filing.
• Amnesty windows are time-limited and discretionary. If CBIC issues one, act on the day it is notified — do not wait until the last week of the window, when the portal often slows under heavy traffic.
• Section 29 registration cancellation, not the late fee, is the existential risk from persistent non-filing. A capped Rs. 2,000 fee is recoverable; rebuilding a cancelled registration while losing GST continuity is not.