CMP-08 and GSTR-4: The Composition Filing Cycle

The Composition Filing Cycle explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Composition is a simplified regime, and its filing cycle is genuinely simpler — one quarterly statement and one annual return. The complication sits in the interaction between them.

Section 39(2) as substituted: a registered person paying tax under s.10 shall, for each financial year or part thereof, furnish a return of turnover, inward supplies, tax payable and tax paid. Rule 62(1)(i): a statement in FORM GST CMP-08 for every quarter, by the eighteenth day of the month succeeding the quarter. Rule 62(1)(ii): a return in FORM GSTR-4 for every financial year, by the thirtieth day of April following the end of the year.

The cycle

CMP-08 is a payment statement, not a return. GSTR-4 is the annual return.

What goes in CMP-08

A summary of self-assessed liability for the quarter:

• outward supplies, including exempt;
• inward supplies attracting reverse charge, including imports;
• the tax payable — CGST, SGST, IGST, cess;
• interest, if any.

A composition dealer cannot collect tax under s.10(4) and cannot claim credit, so CMP-08 has no credit fields. It is a computation of tax on turnover at the composition rate, plus reverse charge liability.

Reverse charge is the item most often omitted. A composition dealer paying rent to an unregistered landlord, taking a GTA service, or engaging an advocate has an RCM liability — payable in cash, with no credit. ITC on reverse charge →

What goes in GSTR-4

The annual return consolidates:

• turnover for the year;
• inward supplies, including from registered and unregistered suppliers, and RCM supplies;
• tax rate-wise details of outward supplies;
• TDS and TCS credit received;
• tax payable and paid, drawing on the four CMP-08 statements;
• interest and late fee.

The negative liability problem

This is the issue that affected a large number of composition dealers and still recurs.

The cause. GSTR-4 has a table for outward supplies and tax payable for the year. Where that table is left blank — because the dealer assumed the CMP-08 figures would flow through — the system reads the annual liability as nil, while the four CMP-08 payments sit in the ledger as tax paid.

The difference appears as a negative liability in the Negative Liability Statement, and the portal then adjusts subsequent quarters' CMP-08 liability against it — so the dealer appears to owe nothing, pays nothing, and accumulates a liability that surfaces later with interest.

The fix. Report the year's outward supplies and tax payable in the relevant table of GSTR-4, so the annual liability matches the CMP-08 payments and the negative balance does not arise.

Where it has already arisen, the correction is made through a ticket to the GST helpdesk to nullify the negative liability statement — it cannot be corrected by the taxpayer directly.

The lesson generalises: CMP-08 is a payment statement and GSTR-4 is a return. The return must state the liability; it does not inherit it.

Late fee

Section 47(1) applies to a return under s.39, which includes GSTR-4. The notified reduction for GSTR-4 has been set at a lower slab, with a further reduced figure for a nil return.

CMP-08 is a statement, not a return under s.39, so s.47 late fee does not attach to it. A delayed CMP-08 attracts interest under s.50 on the tax, not late fee.

Opting in and out

Rule 3(3) — a person opting for composition files an intimation in FORM GST CMP-02 prior to the commencement of the financial year, along with a statement in FORM GST ITC-03 for the reversal under s.18(4) within sixty days. Section 18(4): reversal on opting into composition →

Rule 6(2) — a person opting out files FORM GST CMP-04 within seven days of the occurrence of the event, and becomes liable to pay tax under s.9 from that date.

Rule 6(4) — where the officer has reason to believe the person was not eligible, a notice in FORM GST CMP-05 issues, with a reply within fifteen days and an order in FORM GST CMP-07.

Rule 40(1) — on ceasing to pay under s.10, credit on stock and capital goods is claimed in FORM GST ITC-01 within thirty days. Section 18(1): ITC on stock →

Key takeaways

• CMP-08 quarterly by the 18th; GSTR-4 annually by 30 April.
• CMP-08 is a payment statement; GSTR-4 is the return.
• Reverse charge liability is payable in cash with no credit, and is the item most often omitted.
• Leaving the outward supply table blank in GSTR-4 creates a negative liability that must be corrected through the helpdesk.
• Late fee under s.47 attaches to GSTR-4, not to CMP-08.
• Opting in uses CMP-02 and ITC-03; opting out uses CMP-04 and ITC-01.

Read next

• CMP-08: Quarterly Payment for Composition Dealers
• GSTR-4 Annual Return for Composition Dealers
• Section 18(4): Reversal on Opting Into Composition
• Section 47: Late Fee, and the Caps That Actually Apply

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition) and the ICAI Handbook on Composition Scheme under GST (February 2026).