CMP-08: The Ultimate Guide to Quarterly GST Returns for Composition Dealers

With the implementation of GST (Goods & Services Tax) in India, the tax landscape saw a seismic shift. This monumental tax reform was accompanied by new procedures, notifications, and forms to ensure compliant trade practices. One such notable introduction has been Form CMP-08 – a quarterly return that must be filed by composition dealers under GST.

The emergence of Form CMP-08 in April of 2019 marked a significant step towards simplifying compliance for composition dealers. Replacing its predecessor, the quarterly GSTR-4, CMP-08 was devised to streamline the tax payment process and has been in effect ever since the financial year 2019-2020.

Objective and Applicability

The IDEA behind the introduction of Form CMP-08 was to facilitate smooth tax returns for a specific category of taxpayers who chose to pay taxes under Section 10 of the CGST Act 2017 or avail benefits under Notification No. 2/2019-Central Tax (Rate) dated 07th March 2019.

The Central Board of Direct Taxes (CBDT) classifies these taxpayers under a ‘special category of persons’ and has initiated a distinct procedure for their tax return filings under the composition scheme.

Under CMP-08, taxpayers providing taxable goods or services are required to deposit to the government treasury on a quarterly basis (on or before the 18th of the month following any quarter of a fiscal year).

The exact nexus of dealers that need to file CMP-08 include:

1. Suppliers of goods, such as manufacturers and retailers, who had an annual aggregate turnover of up to Rs.1.5 crores (Rs.75 lakhs for special category states except for Jammu & Kashmir and Uttarakhand) in the previous financial year – with some exceptions.
2. Providers of services who fulfil the conditions stated under the Notification Number 2/2019 Central Tax (Rate) dated 7 March 2019 having the aggregate annual turnover up to Rs.50 lakh in the previous financial year.

Careful consideration of the specific exceptions associated with these categories ensures that businesses remain GST compliant, and align with the format devised by CBDT for filing their tax returns.

CMP-08 Filing Process Breakdown

Let’s delve into how a composition dealer can meticulously file CMP-08 by understanding the form section by section:

Part 1: Identification and Time Period

• Financial Year: Start by selecting the period for which the return is being filed.
• GSTIN: This is your unique Goods and Services Tax Identification Number which will drop in automatically.

Part 2: Legal and Procedural Details

• Legal Name: As reflected on your GST certificate.
• Trade Name: The name your business is known by, if different from the legal name.
• ARN: Application Reference Number, which can help you track the status of your submission. To know more on ARN, check out this comprehensive guide on What is ARN in GST?
• Date of Filing: This is the date when you file your CMP-08 form.

Part 3: Tax Liability Details

This is the most critical section which encompasses the following details:

Outward Supplies:

• Taxable Value: The net taxable value of your outward supplies after adjusting for any credits or debits.
• Tax Rate and Amounts: Segregated into CGST, SGST/UTGST, and IGST.

Inward Supplies Attracting Reverse Charge:

• It includes taxes due on services or goods received which are subject to reverse charge.
• Enter the taxable value and the corresponding tax amounts.

Tax Payables and Payments:

• It shows your total tax liability and the amount of tax that needs to be paid in cash.
• As a composition dealer, you can’t utilize Input Tax Credit (ITC), so the entire tax payment is made in cash.

Part 4: Verification and Declaration

• This is your commitment to the accuracy and truthfulness of the information provided. Ensure that the details are verified and the form is signed by an authorised signatory.

Compliance is Key

Failing to file CMP-08 within the stipulated time invites a penalty, which under the current norms, amounts to INR 200 per day, split equally between CGST and SGST, capping at INR 5000. This late fee is calculated from the due date of filing to the actual date when the return is filed.

Moreover, a delay in settling the payable tax also accrues an interest of 18% p.a. This interest is computed from the due date up to the date of payment. It’s best to stay ahead of deadlines to avoid these additional costs.

For further questions or guidance, feel free to reach out to professional GST return filing services that can aid in ensuring smooth and timely compliance with GST regulations.

Penalties for Non-Compliance and Interest on Delayed Payment

Non-compliance with the GST tax regime can have financial consequences. Here is what happens if a composition dealer does not adhere to the rules related to the CMP-08 form:

• Late Fee: Under GST law, a late fee is applicable if the CMP-08 is not filed within the due date. The fee is levied at the rate of INR 200 per day of delay (INR 100 under CGST and INR 100 under SGST), subject to a maximum of INR 5000.
• Interest: In addition to the late fee, interest must be paid at the rate of 18% per annum if the tax is not paid on time. The interest is charged on the tax amount due from the day following the due date until the date when the payment is actually made.

Strictly adhering to the due dates is crucial. The 18th of the month, following the end of a quarter, is the deadline you can’t afford to miss. Missing these dates not only increases your financial burden but can also impact your business’s credibility.

Frequently Asked Questions (FAQs)

Who needs to fill and submit Form GST CMP-08?

Composition dealers who have opted for the composition levy via Form GST CMP-02, as well as those registered as composition taxable persons through Form GST REG-01.

Are there pre-conditions for filing Form GST CMP-08?

Yes. The taxpayer should have an active GSTIN, a valid User ID and password, and for digital submissions, a non-expired or non-revoked DSC. Previous quarters’ CMP-08 filings should also have been completed.

Is there a mandate to file CMP-08?

Filing Form GST CMP-08 is mandatory for each relevant quarter, regardless of whether there were any transactions or tax liabilities during that period. Nil returns must also be filed where applicable.

Can CMP-08 liabilities be discharged through ITC?

No, since composition scheme taxpayers cannot claim ITC, liabilities must be cleared solely via cash payments.

Is there any provision for revising CMP-08 after filing?

No revisions can be made once the form is filed. Hence, it is important to ensure all details are accurate before submission.

Wrapping Up: Ensuring Successful GST Compliance

Ensuring compliance with the GST framework necessitates a proactive approach, especially for those registered under the composition scheme.

Form CMP-08 emerges as a crucial tool simplifying tax filing, making it incumbent upon eligible taxpayers to understand its nuances thoroughly. Let’s recapitulate the primary takeaways:

• Form CMP-08: This is a quarterly return form aimed at simplifying tax payment for composition dealers. It should be filed on or before the 18th of the month, following a fiscal quarter.
• Filling CMP-08: The form is divided into 4 key parts – selecting the financial year and quarter, auto-populated legal details, detailed tax liability summary, and verification. Each needs to be filled with the utmost accuracy.
• Compliance Details: Non-compliance results in a late fee of INR 200 per day and an interest of 18% per annum on delayed tax payments.

Key-points

• Filing CMP-08 is mandatory for all applicable quarters.
• Nil returns are required even when there is no liability.
• No revisions allowed post-submission, so accuracy is paramount.

Finale Words on CMP-08

As you look to file your returns, always tap into credible resources and get professional GST advice when needed. Filing your Form CMP-08 on time and correctly not only contributes to the nation’s fiscal structure but also elevates your business standing by ensuring compliance with legal and financial obligations.

Thus, while there can be a multitude of facets to GST, Form CMP-08 stands out as a simplified, straightforward procedure for composition dealers nationwide.

Remember, staying informed and compliant isn’t just about keeping penalties at bay—it’s about aligning your business with the larger vision of the nation’s economic progress. With this, we conclude our comprehensive guide on CMP-08. Always keep your financial advisor close and your filing deadlines closer!