If you’re running a small business in India, figuring out which GST return to file can be confusing. Should you file GSTR-4 or GSTR-9? The answer depends on your business turnover and registration type. This guide breaks down everything you need to know about both forms, their deadlines, and who needs to file what in 2026.

Understanding GST Annual Returns: The Basics

The Goods and Services Tax (GST) system requires different types of annual returns based on your business structure and turnover. Think of these as your yearly summary reports to the tax department.

Two main annual returns apply to small businesses:

• GSTR-4: For composition scheme taxpayers
• GSTR-9: For regular GST taxpayers (with conditions)

Your choice isn’t really a choice at all – it’s determined by which GST scheme you’re registered under.

GSTR-4: For Composition Scheme Dealers

Who Must File GSTR-4?

GSTR-4 is mandatory for all businesses registered under the GST composition scheme. This includes:

• Small traders with turnover up to ₹1.5 crore (₹75 lakh for special category states)
• Manufacturers with turnover up to ₹1.5 crore
• Restaurant service providers (except those serving alcohol)

GSTR-4 Filing Deadline for 2026

For Financial Year 2025-26, the GSTR-4 deadline is June 30, 2026.

This represents a major change from previous years. Earlier, the deadline was April 30, but Notification No. 12/2024 extended it to June 30 for FY 2024-25 onwards. This extra two months gives composition dealers more time to compile their annual data.

What Information Does GSTR-4 Contain?

GSTR-4 summarizes your entire financial year in one document:

• Total sales (both intra-state and inter-state)
• Exempt supplies and nil-rated supplies
• Tax paid through challan
• Details of tax paid on purchases (if any)
• Any tax liability and interest paid

Filing Process for GSTR-4

Filing GSTR-4 is straightforward since most data auto-populates from your quarterly CMP-08 forms:

1. Log into the GST portal with your credentials
2. Navigate to Returns > Annual Return > GSTR-4
3. Select the relevant financial year
4. Review the auto-populated data from your CMP-08 filings
5. Add any missing information or corrections
6. Submit and file the return

Since composition dealers don’t collect tax from customers, the form is relatively simple compared to regular GST returns.

GSTR-9: For Regular GST Taxpayers (With Major Exemption)

The Big News: Exemption for Small Taxpayers

Here’s what many small business owners don’t know: if your aggregate annual turnover doesn’t exceed ₹2 crore, you don’t need to file GSTR-9 at all.

This exemption became permanent through Notification No. 15/2025-Central Tax, effective from FY 2024-25 onwards. Previously, this was a year-to-year exemption that created uncertainty.

Who Must File GSTR-9 in 2026?

Only regular GST taxpayers whose aggregate turnover exceeds ₹2 crore need to file GSTR-9. This includes:

• Businesses with annual turnover above ₹2 crore
• Input Service Distributors
• E-commerce operators
• Certain specified taxpayers (as notified)

GSTR-9 Filing Deadline for 2026

For businesses required to file GSTR-9, the deadline for FY 2025-26 is December 31, 2026.

What’s Included in GSTR-9?

GSTR-9 is comprehensive and includes:

• Summary of outward supplies
• Summary of inward supplies
• Input tax credit details
• Tax paid and liability
• Refund claims
• Late fees paid
• Demands and refunds during the year

Key Differences Between GSTR-4 and GSTR-9

Aspect	GSTR-4	GSTR-9
Who Files	Composition scheme dealers	Regular GST taxpayers (turnover > ₹2 crore)
Deadline 2026	June 30, 2026	December 31, 2026
Complexity	Simple (auto-populated from CMP-08)	Complex (detailed reconciliation required)
Input Tax Credit	Not applicable	Detailed ITC reconciliation required
Frequency	Annual	Annual (if required)
Penalty for Late Filing	₹200 per day	₹200 per day

Which Return Should Your Business File?

The decision tree is simple:

Step 1: Check Your GST Registration Type

• Composition Scheme: File GSTR-4 (mandatory)
• Regular GST: Go to Step 2

Step 2: Check Your Annual Turnover (For Regular GST)

• Turnover ≤ ₹2 crore: No annual return required
• Turnover > ₹2 crore: File GSTR-9

Common Mistakes to Avoid

For GSTR-4 Filers

• Don’t assume auto-populated data is always correct – verify against your books
• Don’t miss the June 30 deadline – it’s later than most other GST deadlines
• Don’t forget to file if you’ve been filing CMP-08 quarterly

For GSTR-9 Filers

• Don’t ignore the exemption if your turnover is under ₹2 crore
• Don’t wait until the last minute – GSTR-9 requires significant reconciliation
• Don’t file GSTR-9 if you’re under the threshold – it’s unnecessary

Penalties and Consequences

Both GSTR-4 and GSTR-9 carry a late filing fee of ₹200 per day, subject to a maximum amount based on the tax liability.

For GSTR-4

Late filing penalty applies until you file the return. Since composition dealers typically have lower tax liabilities, the maximum penalty is usually capped at a reasonable amount.

For GSTR-9

The penalty can be substantial for high-turnover businesses. Additionally, failure to file GSTR-9 can lead to other complications like suspension of GST registration in extreme cases.

Tips for Smooth Filing

Throughout the Year

• Maintain proper books of accounts
• File your monthly/quarterly returns on time
• Reconcile your books with GST returns regularly
• Keep digital copies of all invoices and challan receipts

Before Filing Annual Return

• Download and review all your monthly/quarterly returns
• Reconcile your books with filed returns
• Identify any discrepancies early
• Keep your GST certificate and other documents ready

Impact of Recent GST Changes

The permanent exemption for small taxpayers from GSTR-9 filing represents a significant policy shift. The government recognized that the compliance burden for small businesses was disproportionate to the revenue benefits.

This change affects approximately 75% of GST taxpayers, according to industry estimates. For these businesses, the focus now shifts entirely to timely filing of monthly/quarterly returns.

Looking Ahead: GST Compliance for Small Businesses

The GST system continues to evolve with small business needs in mind. Recent changes include:

• Extended deadlines for annual returns
• Simplified forms for composition dealers
• Better auto-population of data
• Reduced compliance burden for small taxpayers

However, regular compliance remains crucial. Even if you’re exempt from annual returns, your monthly or quarterly GST returns must be filed on time.

Frequently Asked Questions

1. Can I choose between GSTR-4 and GSTR-9?

No. The type of return you file depends on your GST registration type and turnover. Composition dealers must file GSTR-4, while regular GST taxpayers with turnover above ₹2 crore must file GSTR-9.

2. What if I forget to file by the deadline?

You can still file the return after the deadline, but you’ll need to pay a late fee of ₹200 per day. File as soon as possible to minimize penalties.

3. Do I need to file both GSTR-4 and GSTR-9?

No business files both. You file either GSTR-4 (if on composition scheme) or GSTR-9 (if regular GST with turnover above ₹2 crore) or nothing (if regular GST with turnover below ₹2 crore).

4. Can I switch from composition to regular scheme mid-year?

Yes, but you’ll need to file different returns for different periods. Consult a tax professional to understand your specific obligations.

5. What happens if my turnover crosses ₹2 crore?

If your turnover exceeds ₹2 crore in a financial year, you become liable to file GSTR-9 for that year, regardless of your previous years’ turnover.

Conclusion

Understanding whether to file GSTR-4 or GSTR-9 comes down to knowing your GST scheme and turnover. The recent policy changes have simplified compliance for most small businesses, with the permanent exemption from GSTR-9 for businesses under ₹2 crore turnover.

For composition scheme dealers, GSTR-4 remains mandatory but manageable with the extended June 30 deadline. Regular GST taxpayers should celebrate the exemption if they qualify, but must maintain rigorous monthly/quarterly filing discipline.

The key to GST compliance isn’t just about annual returns – it’s about maintaining good records throughout the year and filing your regular returns on time. Whether you file GSTR-4, GSTR-9, or neither, consistent compliance habits will serve your business well.

Remember to consult with a qualified chartered accountant or tax advisor for your specific business situation, as GST rules can be complex and change frequently.