ANNUAL RETURN OF COMPOSITION DEALERS

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mohamed ali & co (Querist)
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08 July 2025 a dealer having an annual sales turnover outward supply of about Rs. 20,00,000 per annum has paid gst at 1% Rs. 20,000 and filed quarterly returns. But he has not filed the annual returns. Now he has received a notice to file the annual returns. He is required to pay Rs. 10,000 towards late fee for the year 2019-20. Similar late fee is attracted the next years also. Can the experts give the provisions of GST Act in this issue and inform if there is any way to avoid the levy of late for small traders having very minimal sales.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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12 August 2025 1. Applicability of Annual Return for Composition Dealers:
Under GST law, every registered taxpayer, including Composition dealers, is required to file an Annual Return in Form GSTR-4 for each financial year.
Composition taxpayers pay tax at a prescribed rate (e.g., 1% for traders) and file quarterly returns (CMP-08).
But filing Annual Return (GSTR-4) is mandatory regardless of turnover or tax paid.
2. Late fee provisions for non-filing or delayed filing:
Section 47(2) of the CGST Act, 2017, provides that if a registered person fails to furnish the annual return within the due date, he shall pay a late fee of Rs. 100 per day (Rs. 50 CGST + Rs. 50 SGST).
Maximum late fee cap for late filing of annual return is Rs. 5,000.
For a Composition dealer who filed late for the FY 2019-20 and is asked to pay Rs. 10,000 (likely combining CGST + SGST late fees), this is consistent with the law.
3. Is there any waiver for small dealers or minimal sales?
Unfortunately, there is no exemption or waiver from late fee for small or composition dealers in the GST Act.
The law is strict and mandatory, and penalty/late fee applies for non-filing.
However, some states or the central government may grant relief or waiver in special cases or COVID-related notifications — but these are exceptional and temporary.
4. Possible options:
File the annual return immediately to stop further accumulation of late fee.
If you have valid reasons or hardship, you may file an application for waiver or reduction of late fee with the GST officer, but approval is discretionary.
In some cases, the late fee can be waived for genuine reasons via GST Amnesty schemes or notifications (check the latest updates).
Otherwise, compliance is the best way to avoid late fees.

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