Composition scheme: keep CMP-08 and annual GSTR-4 separate

Verify the scheme and period

Composition treatment is an option subject to statutory conditions; it is not inferred merely from a small turnover figure. Thresholds and eligibility can depend on the type of supply, location, registrations under the same PAN and the notification applying to the period. Certain suppliers and activities are excluded. Confirm the registration profile and effective date on the GST Portal before using a composition workflow.

A taxpayer paying composition tax cannot collect GST from the recipient or claim input tax credit, and issues a bill of supply for composition supplies. Check the prescribed wording and display obligations. Inward supplies attracting reverse charge require separate tax payment at the applicable rate; composition status does not remove that liability.

Review the goods or restaurant route separately from the service or mixed-supply route. Confirm the applicable threshold, permitted service component, rate and exclusions for the actual activity; this article does not assign one threshold or rate to every composition taxpayer.

Inter-State outward supplies are not permitted under the composition route. Do not apply the older blanket e-commerce exclusion to all supplies of goods: from 1 October 2023, Notification 36/2023–Central Tax prescribes a procedure for qualifying goods supplied through an electronic commerce operator, while retaining the inter-State restriction. Services through such an operator require a separate eligibility review.

Prepare each quarter for CMP-08

Form GST CMP-08 is the statement-cum-challan used to declare the self-assessed liability and make quarterly payment. It is not the annual return. The normal CMP-08 deadline is the 18th of the month following the quarter, subject to a notified extension. Build a quarter file from turnover records, inward supplies attracting reverse charge, credit or debit adjustments and the relevant rate category. Reconcile receipts and books, then compare the calculated liability with the portal form and ledgers.

Do not wait for the annual return to reconstruct four quarters. Save the filed CMP-08 acknowledgement, payment evidence and a short calculation note for each quarter. A nil figure should follow from the complete applicable facts, not just from zero sales in one register.

Reconcile annual GSTR-4

GSTR-4 is the annual return for the relevant composition taxpayers. The normal deadline for FY 2023–24 was 30 April 2024. Notification 12/2024–Central Tax changed the normal deadline to 30 June following the financial year from FY 2024–25 onwards. Check for any period-specific extension or relief before acting.

Before preparing the return, reconcile annual turnover with the four quarterly working papers, books, bills of supply, bank records and any portal data. Investigate registration changes, movement into or out of the scheme, and transactions around the effective date. Annual totals should be explainable from the quarter files even though CMP-08 and GSTR-4 serve different functions.

Check the GST Portal for the current due dates, late-fee relief and form instructions for the financial year. If eligibility was breached or regular registration should have applied, the remedy is fact-specific and may affect invoicing, tax and credit; a simplified annual reconciliation cannot cure it. Keep scheme eligibility evidence with the return records so a later reviewer can see why the composition route was used.