The Goods and Services Tax Network (GSTN) has issued Frequently asked questions (FAQs) and User Manual dated March 24, 2021 w.r.t. opting in for Composition Scheme for the financial year 2021-22.
I. FAQ’s – To Opt Composition Scheme (Explained under GST)
Q. How to opt for the Composition Scheme in GST?
Ans. You can opt for the Composition Levy under GST if you are a regular taxpayer with an aggregate annual domestic PAN-based turnover as specified from time to time.
However, you cannot opt for the Composition Levy if you are/you make:
- any supply of goods which are not liable to be taxed under this Act
- inter-state outward supplies of goods
- supplies through electronic commerce operators who are required to collect tax under section 52.
- a manufacturer of notified goods
- a casual dealer
- a Non-Resident Foreign Taxpayer
- a person registered as Input Service Distributor (ISD)
- a person registered as TDS Deductor/Tax Collector
Q. How do I apply for Composition Scheme if I am already registered as a regular taxpayer?
Ans. To opt for the Composition Levy, perform the following steps on the GST portal:
- Log in to the Taxpayers’ Interface
- Go to Services > Registration > Application to Opt for Composition Levy
- Fill the form as per the form specification rules and submit
Q. How do I convert from regular to composition scheme in GST?
Ans. Any taxpayer who is registered as normal tax payer under GST needs to file an application to opt for Composition Levy in Form GST-CMP-02 at GST Portal prior to the commencement of financial year for which the option to pay tax under the aforesaid section is exercised.
Q. When can I opt for the Composition Levy?
Ans. In order to avail this scheme, you need to file an online application to Opt for Composition Levy with the tax authorities. Taxpayers who can opt for this scheme can be categorized as below:
- New Taxpayers: Any person who becomes liable to register under GST Act, after the appointed day, needs to file his option to pay composition amount in the Application for New Registration in Form GST REG-01.
- Existing Taxpayers: Any taxpayer who is registered as normal tax payer under GST needs to file an application to opt for Composition Levy in Form GST-CMP-02 at GST Portal prior to the commencement of financial year for which the option to pay tax under the aforesaid section is exercised.
Q. I am a registered taxpayer availing the composition scheme under GST Portal. Do I need to file fresh application to opt for composition scheme?
Ans. For those taxpayers, who are already availing the composition scheme, there is no requirement to file fresh application opting for the composition scheme, subject to compliance of relevant conditions/restrictions in this regard.
The Complete FAQ’s can be accessed at: https://tutorial.gst.gov.in/userguide/compositionpoc/optforcomposition.htm
II. User Manual – Online Procedure To Opt For Composition Levy & File CMP 02
Q. How to file gst form cmp 02 online on the GST Portal?
Ans. The steps to opt for composition scheme under GST are as follows:
1. To opt for composition levy access the URL https://www.gst.gov.in/. The GST Home page will be displayed.
In case of New Registration:
2. Log into the GST Portal by entering your login Credentials.
3. Once you have logged in, select ‘Application to Opt for Composition Levy’ from the Registration Menu.
4. You will be directed to a new screen – Application to Opt for Composition Levy. Your GSTIN, Legal Name of Business, Trade Name (if any), and Address of Principal Place of Business will be displayed.
5. Below that, your Nature of business and Jurisdiction will be listed.
The Complete User Manual can be accessed at: https://tutorial.gst.gov.in/userguide/compositionpoc/compositionscheme.htm