written by Khatabook | September 29, 2021

Paying GST Liability in CMP-08 on GST portal: Step-By-Step Guide

 The composition scheme was introduced to make Goods and Services Tax or GST compliances easy for the small taxpayers. CMP 08 is also another step taken by the government for simplifying the procedure of return filing and tax payment for the taxpayers under the composition scheme. 

The taxpayers whose aggregate annual turnover does not exceed INR 1.5 Crores can opt for the composition scheme. Form CMP-08 is a statement cum challan applicable from financial 2019-20 onwards for taxpayers under this scheme. GST CMP 08 due date is the 18th of the next month following the relevant quarter. Earlier, the taxpayers were required to file GSTR-4 quarterly, which is now replaced with CMP-08 filing.

What is a Composition Scheme?

The Composition Scheme is an easy option or scheme to help small taxpayers with the compliances and formalities under the GST law. Some integral points of this scheme are:

a. Manufacturers, dealers, and restaurants (not serving  alcohol) can get registered under this scheme if their turnover on an all India basis does not exceed Rs. 1.5 Crores in a year. 

b. This limit is Rs. 75 Lakhs for North-Eastern states and Himachal Pradesh. 

c. The service provider whose annual turnover does not exceed Rs. 50 Lakhs a re also eligible for this scheme.

If you are also a small taxpayer, you can also get registered in this scheme and avail of the following relaxation and benefits:

1. You do not need to maintain detailed records of your transactions.

2. You can pay GST at lower tax rates as applicable in this scheme.

3. File GST return and pay Goods and Services Tax quarterly.

4. Reduce your compliance cost.

Form to Register In The Composition Scheme:

If you are a small taxpayer and want to get registered under this scheme, you have to file form GST CMP 02 on the GST portal. To avail of the benefits of this scheme, you have to give a declaration on the GST portal before the beginning of the financial year.

What is CMP-08 in GST?

  • CMP-08 is a statement cum challan to be filed by the composition taxpayers. The details of the self-assessed tax liability of a given quarter are to be entered in this form. 
  • If you are a taxpayer under the composition scheme, you have to fill this form quarterly until the 18th of the next month of the relevant quarter. 
  • You have to enter the details of outward supplies, inward supplies, tax payable and interest (if there is a delay in submission and you are filing this form after the prescribed due date) in the GST CMP 08 form. 
  • You have to file the CMP-08 form online on the Goods and Services Tax portal. It is like a summary of your self-assessed tax liability under GST.

GST CMP 08 Due Date

You have to submit this return by the 18th of the month following the relevant quarter on the CMP login page.

Quarter

Due date

1st Quarter (April - June)

18th July

2nd Quarter (July - September)

18th October

3rd Quarter (October - December)

18th January

4th Quarter (January - March)

18th April

However, the Central Board of Direct Taxes or CBDT can give relaxation in the return filing due dates. 

For example, for the quarter ending 31st March 2021, the due date for filing the CMP-O8 form was extended. The taxpayers were allowed to file this return without any interest for delayed submission until 3rd May 2021, with 9% interest from 4th May to 18th May 2021 and 18% interest from 18th May onwards.

Also Read: CBDT No TDS on GST Component

How To File Composition GST Return 

Check the given steps to understand how to file CMP 08 in the GST portal and pay GST liability online:

Step 1: Open the online GST Portal - https://www.gst.gov.in/ 

Step 2: Log in to the GST portal using your 15 digit user ID and password.

Step 3: Click on the 'Services' option, select 'Returns dashboard'.

Step 4: File returns page will appear; select the Financial Year and the return filing period or quarter for which the return is filed.

Step 5: Click on the 'Search' button.

Step 6: In the box with 'Statement for payment of self-assessed tax GST CMP-08' written on it, click the 'Prepare Online' button.

Step 7: If you have no GST payable, select the 'File Nil GST CMP-08' checkbox to file Nil GST return and if you have GST payable, enter the details in the 'Summary self-assessed liability' table.

Step 8: After entering the details of the value of outward and inward supplies, tax thereon and interest (if any for late submission of return), click on 'Save'.

Step 9: Click on Preview draft GST CMP 08 to view a summary of self-assessed tax liability, and if details are accurate, click on 'Proceed to file tab'.

After performing the above steps, you will see a payment of tax page displaying cash ledger balance and a summary of tax payable. 

Now follow these steps to pay GST liability on CMP 08 login page. There can be two cases:

Case 1: If your GST liability is less than the cash balance in the electronic cash ledger, no additional cash is required. You can use the balance available in the cash ledger for payment of the tax liability.

Case 2: If your GST liability is more than the balance available in the electronic cash ledger, additional cash will be required to pay tax. Click on the 'Create challan' tab. Select the payment mode, i.e. NEFT or RTGS or Net Banking or Over the Counter, click 'Generate challan', and make the payment with the dealer challan.

Note: In GST law, a return is valid only if filed after the payment of self-assessed tax liability. If you proceed to file a return without paying outstanding tax liability, an error message can appear as 'Please clear the pending liability first and then proceed for filing’.

Hence, first, pay the tax and then file the GST CMP-08 return.

Step 10: After paying the tax and previewing draft GST CMP 08, click on the 'File GST CMP 08' tab.

Step 11: Select the verification mode, i.e. 'File with DSC' or 'File with EVC' and verify your return.  The digital signature or DSC verification is mandatory for Companies and LLPs.

A success message will appear, and the GST CMP 08 form status for the relevant quarter will change to 'Filed'.  The Goods and Services Tax portal will generate an Application Reference Number (ARN) after successfully filing the return. A message will also be sent to the registered email ID and mobile number of the taxpayer.

Also Read: Types of GST Returns: Forms, Due Dates & Penalties

Who Can File Nil GST CMP 08?

If your tax payable is nil and fulfil the following conditions, you can file a Nil GST CMP 08 form:

1. Not made any GST sales and;

2. Do not have tax payable under reverse charge and;

3. Do not have any other tax payable.

Payment of GST by Composition Scheme Taxpayers

You cannot take credit for input or inward tax you pay on your purchase of goods and services for the business if you are registered under the composition scheme. Hence, you have to pay your tax liability out of your pocket without adjusting any input tax credit. You have to pay:

1. GST on sale of taxable goods or services

2. Tax on services received under reverse charge

3. Tax on purchases made from an unregistered dealer (not yet applicable)

4. Tax on import of services

Returns To Be Filed By A Composition Dealer:

The composition dealers have to file the following returns as per the GST law:

a. GST CMP 08 form: It is a quarterly statement of self-assessed tax liability to be filed till the 18th of the next month of the relevant quarter.

b. GSTR-4: It is to be filed annually until 30th April of the next financial year.

c. GSTR-9A: It is an annual return to be filed till 31st December of the next financial year.

Penalty Or Late Fee For Not Filing CMP 08 Within The Due Date

1. If you are a composition taxpayer and do not submit the GST CMP 08 form within the due date, you will be charged a late fee of Rs. 200 (Rs. 100 for CGST and Rs. 100 for IGST) per day for every day of delay. This late fee can be a maximum of Rs. 5000. The late fee per day is to be paid from the start of the due date till the actual date of filing of the return.  

2. Also, non-filing of CMP 08 for two consecutive quarters can block your e-way bill registration. If your e-way bill registration is blocked, you will have to apply through form GST EWB 05 to the jurisdictional tax official for the unblocking of e-way bill registration. You can also be asked to fill all the pending returns of previous quarters to get your e-way bill registration unblocked.

GST Rates Applicable Under The Composition Scheme 

In the composition scheme, you have to pay Goods and Services Tax at lower rates. The GST rates for taxpayers in this scheme are as under:

Taxpayer

CGST

SGST

Total

Manufacturer and Trader

0.5%

0.5%

1.0%

Restaurant (not engaged in serving alcohol)

2.5%

2.5%

5.0%

Other service providers (Turnover < 50 Lakh)

3.0%

3.0%

6.0%

Who Cannot Opt For The Composition Scheme And Cannot File The CMP 08 Form?

You can't opt for the composition scheme in the following cases even if your annual turnover does not exceed the prescribed limits:

1. If you are a Pan Masala, Tobacco or Ice cream manufacturer.

2. If you make inter-state supplies in your business.

3. If you are a non-resident taxable person (NRTP) or a casual taxable person (CTP).

4. If you supply goods through an e-commerce operator.

Bill of Supply

The composition dealers cannot issue tax invoices. Under the composition scheme, you cannot take an input tax credit of taxes paid on purchasing goods and procuring services for your business. You cannot charge tax from the customer. You have to directly deposit your self-assessed GST liability through dealer challan in GST CMP 08. Hence, you have to issue a Bill of Supply instead of a tax invoice under the GST law. It is also necessary to have " composition taxable person, not eligible to collect tax on supplies", written on the Bill of Supply. 

Also Read: Important Benefits of Registering for Composition Scheme under GST

Conclusion: 

The composition scheme is a good step taken by the government to simplify doing business, and its GST related formalities are easy to comply with for the small taxpayers. The relaxation from maintenance of detailed records saves compliance costs for small businesses. The facility of quarterly filing of GST CMP 08 form has reduced the burden on small retailers and traders. The most important advantage of the composition scheme is the lower rates of taxes for the small taxpayers. It helps small retailers and traders to maintain better liquidity in their businesses.  The simplified procedure of return filing and tax payment on the online GST portal has made compliances easy for small taxpayers. They can concentrate more on their business than its formalities. With the Khatabook app, you can easily understand how to adhere to GST compliance and help your business grow. 

Frequently asked questions

1. What is the due date for filing GST CMP 08 form?

The due date to file the GST CMP 08 form is the 18th of the next month of the relevant quarter.

2. Do composition dealers have to file monthly returns in GST law?

No, the composition dealers are not required to file monthly returns.

3. Can the composition dealers issue tax invoices?

No, the composition dealers cannot issue tax invoices as they cannot charge tax from the customers.

4. What is the Bill of supply?

The composition scheme taxpayers issue a Bill of supply to the customers instead of a tax invoice for their sales.

5. Which form is to be filed for the composition scheme?

The GST CMP 02 form is to be filed electronically to exercise the composition scheme.

6. Can the taxpayer opt for a composition scheme in one state and a normal scheme for businesses in other states?

No, the composition scheme can be taken uniformly for businesses in all the states. 

7. What is the rate of GST for the manufacturers and traders in the composition scheme?

The tax rate is 0.5% CGST and 0.5% SGST for the manufacturers and traders in the composition scheme.

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