What is the Full Form of CMP in GST?
The CMP Full Form in GST is Composition. The GST Composition Scheme is a guarantee-based scheme designed to ease the compliance burden of small taxpayers spread across the expanse of this country. This is an initiative under Goods and Services Tax (GST) law that allows eligible businesses to avail themselves of lower GST rates with the requirement to file fewer returns compared to the regular procedure of GST. This relief scheme is designed to ease small businesses from tax and compliance burdens, especially those small businesses that are seeking to alleviate the effect of the COVID-19 pandemic.
Summary of the GST Composition Scheme:
This is a kind of system that reduces tax compliance for small businesses, enabling the completion of returns less frequently and at lower tax rates.
Eligibility and Registration:
This scheme applies to all businesses with an annual turnover of Rs. 1.5 crore. In the case of northeastern states and hill states, the threshold is fixed at Rs. 75 lakh. Filing Form GST CMP-02, the eligible businesses must be registered, preferably at the beginning of the financial year for which the scheme is intended. These registered businesses also come along with certain restrictions. They will not be able to supply any nontaxable goods, participate in inter-state transactions, or sell on the e-commerce platform.