Learn about Yearly Compliance for Composition Scheme in GST, The GST Composition Scheme is a simple tax scheme designed for small taxpayers in India. It reduces compliance burden by allowing a lower tax rate and easier returns. However, even composition dealers must follow yearly compliance requirements under GST. Missing these compliances can lead to penalties, late fees, or even cancellation of GST registration.
In this article, we explain in detail the annual compliances for composition dealers under GST, including returns, payments, and declarations.
✅ Annual Compliance Checklist for Composition Dealers
Every business registered under the GST Composition Scheme must ensure the following yearly compliances:
| Compliance Requirement | Details |
|---|---|
| Annual Return Filing | File Form GSTR-4 once every year by 30th April of the next financial year. |
| Self-Assessment of Turnover | Ensure turnover is within the composition scheme limit (₹1.5 crore for most states, ₹75 lakh for special category states). |
| Payment of Taxes | Pay tax at the applicable composition rate (1%, 5%, or 6% depending on business type). |
| Maintenance of Records | Maintain sales records, stock details, and invoices (Bill of Supply). |
| Declaration on Invoices | Add mandatory wording – “Composition taxable person, not eligible to collect tax on supplies.” |
| Renewal Check | Review turnover yearly to check if you are still eligible for the scheme. |
📌 Annual Return – GSTR-4
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The most important yearly compliance for composition dealers is filing GSTR-4.
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It is filed once a year, unlike regular dealers who file monthly/quarterly returns.
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Due Date: 30th April following the financial year.
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Contents of GSTR-4:
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Summary of outward supplies (sales).
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Summary of inward supplies (purchases).
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Tax liability payable.
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Tax already paid through CMP-08 (quarterly statements).
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👉 Example: For FY 2024–25, GSTR-4 must be filed by 30th April 2025.
⚠️ Penalties for Non-Compliance
If a composition dealer fails to comply with annual requirements:
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Late fee for GSTR-4: ₹200 per day (₹100 CGST + ₹100 SGST), subject to a maximum of ₹5,000.
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Interest: 18% per annum on late tax payment.
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Cancellation: Repeated default may lead to cancellation of the GST registration.
✅ Best Practices for Yearly Compliance
To avoid penalties and ensure smooth compliance, composition dealers should:
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Mark return due dates on a compliance calendar.
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Reconcile books of accounts quarterly to avoid last-minute errors.
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Use GST billing software for Bill of Supply and record maintenance.
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Consult a GST expert before filing GSTR-4.
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Keep copies of all invoices and tax records for at least 6 years.
Conclusion
Yearly Compliance for Composition Scheme in GST is very big part of GST compliance. For composition dealers, yearly compliance under GST mainly revolves around filing GSTR-4, maintaining records, and checking turnover eligibility. Timely compliance ensures smooth business operations and protects against penalties.
👉 Need help with yearly GST compliance? Contact Helptax.in for professional assistance with filing and advisory.