Composition GST Returns Filing

Businesses registered under the GST Composition Scheme enjoy simplified tax filing but must comply with specific return filing requirements. Instead of filing monthly GST returns like regular taxpayers, they:

✔ Pay tax quarterly using CMP-08
✔ File an annual return using GSTR-4

This system helps small businesses, traders, and service providers by reducing compliance burden and offering a fixed tax rate instead of regular GST calculations.

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Basic Plan

₹ 12,999
+GST
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Recent Updates

Need to Update

GSTR-4 is Now an Annual Return – Previously filed quarterly, it is now filed once a year.

CMP-08 for Quarterly Tax Payment – Composition dealers must pay tax quarterly but file returns annually.

Higher Late Fees for Non-Filing – Delayed GSTR-4 filing leads to increased penalties.

No Input Tax Credit (ITC) – Composition dealers cannot claim ITC, even if they purchase from registered taxpayers.

What is CMP-08?

CMP-08 is a quarterly tax payment form used by businesses registered under the GST Composition Scheme. It is not a return but a simple challan to declare turnover and pay GST at a fixed rate.

✅ CMP-08 is filed every quarter to pay GST.
✅ GSTR-4 is filed annually to summarize total turnover & tax paid.

pvt ltd

Process for Filing CMP-08

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Group 49
  • Check your total sales (turnover) for the quarter.
  • Ensure only taxable sales are reported (composition dealers cannot charge GST separately).
  • Confirm that Input Tax Credit (ITC) is NOT claimed (composition taxpayers are not eligible for ITC).

Tip: Use an accounting tool or GST software to generate sales data easily.

  • Visit www.gst.gov.in.
  • Enter Username & Password to access your dashboard.
  • Go to the Returns Dashboard.
  • Select Financial Year & Quarter.
  • Click on “Prepare Online“ under CMP-08.
  • Total Turnover for the Quarter – No need to enter invoice details, just the total amount.
  • GST Tax Liability Calculation:
      • Traders & Manufacturers: 1% GST (0.5% CGST + 0.5% SGST).
      • Service Providers: 6% GST (3% CGST + 3% SGST).
              ✔ Late Fees (If applicable) – System calculates automatically for delayed filing.

📌 Important: Ensure turnover in CMP-08 matches books of accounts to avoid GST notices.

  • Click “Preview CMP-08“ to review your details.
  • If tax is due, make payment using:
      • Cash Ledger – Payment is required before submission.
      • Credit Ledger is NOT allowed (Composition taxpayers cannot use ITC).

📌 Important: GST must be paid before filing CMP-08.

  • Click “Proceed to File“ and submit using:
      • EVC (Electronic Verification Code) – OTP verification via registered mobile/email.
      • DSC (Digital Signature Certificate) – Required for companies & LLPs.
              ✔ Download the acknowledgment receipt for your records.

Due Date for CMP-08: 18th of the month after the quarter ends.

Note: Need to Update

CMP-08 Filing Due Dates (Quarterly Tax Payment)

18th of the month following each quarter

Penalty for Late Filing: ₹50 per day (₹20 per day for Nil return).

Interest on Late Payment: 18% per annum on outstanding tax.

Key Differences Between GSTR-4 & Regular GST Returns

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Before Filing CMP-08 – What to Check?

Before filing CMP-08, composition taxpayers must verify their financial records to ensure accuracy.

What is GSTR-4?

GSTR-4 is the annual return for composition dealers, summarizing their total turnover and tax paid through CMP-08.

GSTR-4 Due Date: 30th April of the following financial year.

pvt ltd

Process for Filing GSTR-4

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Group 49
  • Gather annual turnover details from your books of accounts.
  • Verify quarterly CMP-08 tax payments for the year.
  • Ensure purchases from registered suppliers are recorded correctly.

Tip: Composition taxpayers do not need to provide invoice-wise details – only total turnover is reported.

  • Visit www.gst.gov.in.
  • Enter Username & Password to access your dashboard.
  • Go to Returns Dashboard and select the financial year.
  • Click on “Prepare Online“ under GSTR-4.
  • Enter Total Turnover (Taxable & Exempt Supplies) – No invoice-wise details needed.
  • Verify Tax Paid via CMP-08 – Ensure quarterly tax amounts match.
  • Report Inward Supplies (if any purchases were made from registered taxpayers).
  • Check for Amendments (if any corrections from previous returns are needed).

Tip: Use a GST accounting tool or software for easy data extraction.

  • Click on “Preview GSTR-4“ to review all data before submission.
  • If any errors are found, correct them before submitting.

📌 Important: Once GSTR-4 is filed, no modifications are allowed for the same period.

  • Click “Proceed to File“ and submit using:
      • EVC (Electronic Verification Code) – OTP verification via registered mobile/email.
      • DSC (Digital Signature Certificate) – Required for companies & LLPs.
              ✔ Download the acknowledgment receipt for records.

Due Date for GSTR-4: 30th April of the following financial year.

Note: Penalty for Late Filing – ₹50 per day (₹20 per day for Nil Return).

Key Differences Between GSTR-4 & Regular GST Returns

Need to Update

Need to Update

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Need to update

Before Filing GSTR-4 – What to Check?

Before filing GSTR-4, composition taxpayers must verify their financial records to ensure accuracy.

Frequently Asked Questions

What is GST Input Tax Credit (ITC)?

GST Input Tax Credit allows businesses to deduct the tax they have paid on inputs from the tax they need to pay on output. This means if you are a business owner, you can reduce the taxes you pay on sales by the amount of GST paid on purchases.

Who is eligible to claim GST Input Tax Credit?

Businesses registered under GST can claim ITC. This is applicable to goods and services used for business purposes. It is not available for goods or services exclusively used for personal use or those exempt under GST.

How can I claim GST Input Tax Credit?

To claim ITC, ensure that you possess a valid tax invoice or debit note issued by a registered supplier. You also need to ensure that these purchases are entered in your GST returns and that the taxes on inputs have been paid to the government by your suppliers.

What conditions must be fulfilled to claim ITC?

The conditions include possession of a tax invoice, receipt of goods or services, the supplier has paid the corresponding tax to the government, and the GST return has been filed.

What documents are required to claim ITC?

The essential documents include tax invoices, debit notes, and a receipt of goods or services. Supplementary documentation might include shipping documents and contracts if applicable.

Can ITC be claimed on capital goods?

Yes, ITC can be claimed on capital goods used for the business. However, if the capital goods are used for exempt supplies or personal use, the ITC claim will be restricted accordingly.

What happens if ITC is not claimed within the stipulated time?

ITC should be claimed within the financial year in which the invoice is dated, or before the due date of filing the GST return for September of the following year, whichever is earlier. If missed, the opportunity to claim ITC for that period is lost.

How is ITC managed in case of returns or purchase cancellations?

If goods or services are returned, the ITC claimed on the original purchase has to be reversed. Similarly, for cancellations, any ITC claimed must be adjusted against future liabilities.

Are there any restrictions on claiming ITC?

Yes, ITC cannot be claimed on motor vehicles, food expenses, employee benefits, and other personal consumption goods. Goods and services used for making exempt supplies or for non-business purposes are also not eligible.

How to manage ITC on input services distributed as ISD?

Input Service Distributor (ISD) mechanism allows the distribution of tax credits on input services used at multiple locations of the same business. The ISD registration is required to distribute the credit, and it must issue an ISD invoice clearly mentioning the amount of credit distributed.