Deadline for opting GST Composition Scheme by March 31, 2024: File Form CMP-02 for FY 2024-25; Check Eligibility.
GST-registered individuals can choose to enter the GST Composition Scheme for the fiscal year 2024-25 before March 31, 2024. This scheme offers a simplified tax approach for eligible taxpayers, allowing them to avoid regular filings provided their turnover remains within certain limits. Once a taxpayer opts in, no further notification is required unless eligibility is lost or they decide to exit the scheme.
“A tax advisor mentioned that businesses, including eateries, with an annual turnover up to Rs 1.5 crore (or Rs 75 lakhs for certain northeastern and hill states) are eligible for the GST Composition Scheme. Service providers, excluding restaurant services, must not exceed a Rs 50 lakh turnover to qualify,” according to the expert.
To enroll in the GST Composition Scheme, taxpayers can do so during their initial GST registration or before the new financial year begins if they are already registered.
“For initial GST registration, the scheme is an option. Existing registrants aiming to switch must submit Form CMP-02 electronically before the next financial year starts,” the expert elaborated.
Existing GST registrants looking to opt for the Composition Scheme should log in to the GST portal, navigate to ‘Services’ then ‘Registration’, and select ‘Application to Opt for Composition Levy’ to fill and submit Form CMP-02.
Taxpayers have the flexibility to revert to the regular GST system from the Composition Scheme at any time.
“Shifting back to the standard GST framework is possible by submitting Form CMP-04 anytime within the fiscal year, allowing for the resumption of normal tax payments and tax invoice issuance for all taxable supplies. Additionally, taxpayers can reclaim Input Tax Credit for various stocks and capital goods once they transition,” explained the expert.
Certain taxpayers are ineligible for the GST Composition Scheme:
- Casual taxable persons, or those supplying occasionally without a fixed business location within a state or union territory;
- Non-resident taxable persons without a fixed business location or residence in India;
- Those involved in inter-state supply of goods and services;
- Providers of non-taxable goods and services;
Suppliers through e-commerce platforms responsible for tax collection at source.
“Additionally, manufacturers of specific items like ice cream, pan masala, aerated drinks, tobacco products, fly ash bricks, and certain construction materials are prohibited from using the Composition Scheme as per GST Council directives,” stated the expert.