GST CMP-08 Due October 2026: Composition Scheme Filing Guide

What Happened?

The GST Composition Scheme quarterly tax payment (CMP-08) for the July–September 2026 quarter reached its due date on 18 October 2026. This is a routine compliance deadline, but it requires careful review of composition eligibility criteria, reverse charge obligations, and proper alignment with GSTR-4 annual filings. Many small businesses miss critical checks at this stage, leading to penalties and interest under the GST regime.

Background & Legal Context

The GST Composition Scheme is governed under Section 10 of the CGST Act 2017 and the Composition Levy Rules 2017. Here's the legal framework:

• Who Can Use Composition Scheme: Registered persons whose aggregate turnover in the preceding financial year does not exceed ₹1.5 crore (for goods suppliers) or ₹50 lakh (for service providers and mixed suppliers). From 1 April 2022, traders can opt for composition if their turnover is up to ₹75 lakh.
• CMP-08 Form: This is the quarterly Composition Levy Statement due within 18 days after the end of each quarter. For Q2 (July–September), the deadline is always the 18th of October.
• Tax Rate Under Composition: Goods suppliers pay 1% of turnover, service providers pay 5%, and mixed suppliers pay 5%. No ITC (Input Tax Credit) is available under this scheme.
• Reverse Charge Applicability: Even composition dealers may be liable to pay reverse charge on certain intra-state supplies under Section 9(3) and Section 9(4) of CGST Act. This is a common oversight.
• GSTR-4 Annual Return: Composition dealers must file GSTR-4 (annual return for composition scheme dealers) by 31 December of the following financial year. CMP-08 filings must be reconciled with GSTR-4 at year-end.

Note: The Income Tax Act 2025 does not directly govern GST compliance; however, GST paid or payable is relevant for determining taxable income under Section 30 (business income computation) of the Income Tax Act 2025. For AY 2026-27, ensure your GST and Income Tax records align.

What Does This Mean for You?

If you are operating under the GST Composition Scheme, the October 2026 deadline requires you to verify the following:

1. Turnover Eligibility Check

Before filing CMP-08, confirm:

• Your aggregate turnover in FY 2025-26 did not exceed the threshold (₹1.5 crore for goods, ₹50 lakh for services, ₹75 lakh for traders).
• If you crossed the limit during FY 2025-26, you must exit the composition scheme from 1 April 2026 and file regular quarterly GSTR-1/GSTR-3B returns instead. Backdated exits are not permitted.
• If you've exceeded the limit in Q1 or Q2 of FY 2026-27 already, you cannot continue with composition—shift to regular scheme immediately and file corrected CMP-08 showing nil liability.

2. Reverse Charge Obligations

Even under composition scheme:

• If you purchase supplies from unregistered suppliers and your turnover exceeds specified limits, reverse charge applies.
• If you receive supplies from registered suppliers who are not collecting tax (e.g., supplies exempt from GST), you may owe reverse charge.
• Reverse charge liability must be declared in CMP-08. If applicable, the GST owed is over and above the composition levy.

3. Nil Filing Scenarios

You must file CMP-08 even if:

• You had zero turnover in the quarter (file nil return).
• You closed business mid-quarter (file a return for the period you were active).
• You opted out of composition scheme (file nil CMP-08 for that quarter, then switch to regular scheme).

Failure to file even nil returns can trigger late fee of ₹100-500 per day under Section 47 of CGST Act.

4. Interest and Late Payment

If CMP-08 was not filed or tax not paid by 18 October 2026:

• Interest is charged at 18% per annum on the unpaid tax from the due date until payment.
• A late fee of ₹100-500 per day applies until the first payment is made.
• These penalties are separate from any Income Tax liability. Even if your FY 2025-26 Income Tax return (due 31 July 2026) is filed, GST penalties stand independently.

5. GSTR-4 Annual Return Alignment

By 31 December 2026, you must file GSTR-4 (annual composition return for FY 2025-26). Ensure:

• Total tax paid in all four quarterly CMP-08 filings matches the annual liability in GSTR-4.
• Any amendments to CMP-08 (e.g., corrected turnover figures) are reflected in GSTR-4 before year-end.
• If GSTR-4 shows a tax refund, you can claim it; if it shows additional tax, pay immediately to avoid interest.

What Should You Do Now?

• Immediate (If Not Yet Filed): File CMP-08 for Q2 (July–September 2026) on the GST Portal (www.gst.gov.in) immediately. Even if late, pay the composition tax + interest + late fee to minimize penalties. The longer you delay, the more interest accrues.
• Verify Turnover: Pull your sales invoices for FY 2025-26 and confirm you remain eligible for composition. If not, apply for exit and shift to regular scheme without delay.
• Check Reverse Charge: Review your purchase ledger. If you owe reverse charge, calculate it separately and include it in CMP-08 payment.
• Maintain Records: Keep copies of all quarterly CMP-08 filings, payment receipts, and supporting invoices. You'll need these for GSTR-4 reconciliation and for any GST audit or Income Tax assessment under AY 2026-27.
• Plan for GSTR-4: Start preparing for the annual GSTR-4 return (due 31 December 2026). Ensure all quarterly filings are accurate to avoid last-minute corrections.
• Book Professional Help: If you're unsure about turnover limits, reverse charge, or scheme eligibility, consult a GST professional now. Errors at this stage can cascade into Income Tax issues during the AY 2026-27 assessment.

Key Takeaways

• CMP-08 due date 18 October 2026 is a firm deadline: Late filing attracts interest at 18% p.a. and late fee of ₹100-500 per day. File immediately even if late.
• Turnover threshold is ₹1.5 crore (goods), ₹50 lakh (services), ₹75 lakh (traders): If crossed in FY 2025-26, you must exit composition scheme from 1 April 2026 and file regular returns. Confirm eligibility before filing CMP-08.
• Reverse charge can apply even under composition scheme: It is over and above the standard composition levy. Identify and declare it in CMP-08 to avoid penalties.
• Nil returns must be filed: Even if you had zero turnover or exited mid-quarter, file a nil CMP-08 within the deadline to avoid late fee.
• GSTR-4 annual return due 31 December 2026 must reconcile with quarterly CMP-08 filings: Maintain proper records and ensure consistency. Any GST compliance gaps can affect your Income Tax assessment for AY 2026-27.

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