CBIC has segregated taxpayers across the country, and there are certain business persons who have been given the option to opt for a simplified procedure of compliance under GST. The option is given if you opt for composition scheme under section 10 of the CGST Act 2017 or benefit of Notification NO. 2/2019-dated 7th March 2019-Central Tax Rate. If you are one such specified person, then you need to furnish your return in a simplified statement on a quarterly basis through Form CMP-08.
Table of Content
- 1. Insights on Form CMP-08?
- 2. Who Can File Return Through CMP-08?
- 3. RATE OF TAX UNDER COMPOSITION SCHEME
- 4. CONDITIONS FOR AVAILING COMPOSITION SCHEME
- 5. CMP-08: Important dates
- 6. Penalties For Non-Filing or Delay in filing CMP-08 Return
- 7. INFORMATION TO BE FURNISHED IN FORM CMP-08
- 8. FAQs
- 8.1. Can I use Input Tax Credit to pay the tax liability under the CMP-08?
- 8. 2. What is Negative Liability Adjustment in CMP-08?
- 8. 3. Does it require you to file CMP-08 in case of Zero return?
- 8. 4. If in case I purchase goods from an unregistered person being registered under the composition scheme, do I need to pay the GST?
- 8. 5. Do I need to file GSTR-4 anymore?
1. Insights on Form CMP-08?
A challan/statement through which one can declare the details or summary of their self-assessed tax payable in a certain quarter. CMP-08 also works as a challan to pay your tax return.
Note: For composition dealer- quarterly return is filed in CMP-08 Form and need to file the annual return through the revised format of Form GSTR-4.
2. Who Can File Return Through CMP-08?
If you have opted for the composition scheme, then you can file your return through CMP-08 every quarter. Following two types of taxpayers are registered under the scheme:
1. If you are a supplier and at the same time is a manufacturer or a retailer with an annual turnover of up to rupees 1.5 crores, then you can come within the composition scheme. But specific industries cannot come under the scheme,
- If you are a manufacturer of Pan masala, Ice cream, or Tobacco.
- You are an inter-state supplier
- If you are an ordinary taxable person or a non-resident Indian taxable person
- You have businesses that supply goods via e-commerce platforms
2. If you are a supplier of services with a turnover up to rupees 50 lakhs annually, and successfully fulfil all the mentioned conditions under the Notification No. 2/2019- dated 7th March 2019-Central Tax (Rate).
3. RATE OF TAX UNDER COMPOSITION SCHEME
Persons opting for payment of tax at concessional rate are liable to pay GST at following rate:
|Category||Rate of Tax|
|Manufacturer or Trader of Goods||1% of turnover|
|Restaurant not serving alcohols||5% of Turnover|
|Supplier of Service||6% of Turnover|
4. CONDITIONS FOR AVAILING COMPOSITION SCHEME
- If a PAN holder has more than one GST registration then Composition Scheme u/s 10 or benefit under N/No 2/2019 should opt for all registrations.
- Registered people opting for composition schemes or N/No. 2/2019 can’t collect tax from the recipient of supplies.
- A person opting for a composition scheme or N/No. 2/2019 shall not be entitled to avail Input Tax credit.
- Such a person shall issue a “Bill of Supply” instead of “Tax Invoice”. A person opting for N/No. 2/2019- Central Taxes (Rate) shall specify “taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’ on top of Bill of supply.
- Option of composition scheme shall lapse with effect from date on which aggregate turnover during an F.Y. exceeds the earlier mentioned limit.
5. CMP-08: Important dates
A person opting for Composition scheme or benefit under N/No. 2/2019 is liable to furnish the following returns:
|Form||Due date of Filing|
|GST CMP-08 (A statement-cum-challan used for declaring sales details and payment of tax)||18th of the month following the quarter|
|GSTR-4||30th of the April following the Financial year.|
As mentioned above, you need to file CMP-08 on a quarterly basis. The due date to file the return is generally the 18th of the month succeeding the quarter in a certain financial year.
6. Penalties For Non-Filing or Delay in filing CMP-08 Return
As a taxpayer, if you fail to furnish your return on or before the due date, you will have to pay a late fee of rupees 200 per day for every day of delay. Alongside this, the IGST act also demands an equal amount of late fees with CGST and SGST act, which is Rs 200 per day of delay.
However, there is a maximum cap of Rs. 5000 in the late fees from the start of the due date to the actual date you file your return.
7. INFORMATION TO BE FURNISHED IN FORM CMP-08
At first, you need to select relevant financial year and quarter for which you are filing the return. GSTIN will auto-populate after login at GST portal.
The second column needs to be furnished with details like your Legal name, Trade name and other details. This information gets auto-populated.
Here you will have to furnish the complete taxable value and tax payable under various tax heads as in IGST, CGST, SGST/ UT and cess for the following:
- Outward supplies (including exempt supplies)- Outward supply shall be reported after net off debit/credit notes and amendments.
- Inward supplies attracting reverse charge including import of services
- The payable tax amount- It will auto-populate as the sum of data given in point 1 and 2.
- Amount of interest payable(In case of missing due dates)
- The total amount paid as tax and interest. The amount will auto-populate on the basis of cash payment made. As taxpayer filing GST CMP-08 is not entitled to claim ITC, so, you need to make the entire payment in cash.
Finally, here you need to sign as an authorised signatory, declaring that all the details you have entered are true and correct.
8.1. Can I use Input Tax Credit to pay the tax liability under the CMP-08?
You can’t claim an Input Tax Credit(ITC) if you are registered under the Composition Scheme or you are a beneficiary under N/No 2/2019. As a Composite Dealer, you can pay your tax liability only through generating bank challan or through depositing your cash e-cash ledger.
8. 2. What is Negative Liability Adjustment in CMP-08?
At the time of filing your return through Form CMP-08 if there is any negative entry in the return of the particular quarter it will be carried forward to the next quarter, this process is known as Negative Liability Adjustment. You can find this negative entry reflecting under the ‘Adjustment of negative liability of previous tax period’ column. It may happen when the value of credit notes is more than the value of taxable supplies.
8. 3. Does it require you to file CMP-08 in case of Zero return?
Yes, you have to file the NIL Return form under CMP-08. If you are registered under the composition scheme and don’t have an inward or outward supply in a certain quarter you have to file the ‘NIL Return’ form within the CMP-08.
8. 4. If in case I purchase goods from an unregistered person being registered under the composition scheme, do I need to pay the GST?
Yes, you will have to pay the GST on the reverse charge basis for the goods you have purchased from an unregistered person.
8. 5. Do I need to file GSTR-4 anymore?
If you are registered under the Composition Scheme you don’t need to file GSTR-4 quarterly. But you have to file the CMP-08 by the end of a quarter by 18th of the month following the quarter. However, an annual return in form GSTR-4 is mandatory annually.