In-depth discussion on Composition Scheme under GST (Present scenario)

(Although the heading of the notification states that it notifies the rate, but the power to prescribe rate of tax and value on which such tax has to be paid u/s 10 has been given to Rule 7 of the CGST Rules, 2017.)

This notification, although legally in force as on date, has no relevance as the same provision has now been incorporated in Section 10 by inserting a subsection (2A) of with effect from 1-1-2020. (Discussed later)

These procedures were notified for persons mentioned in the Notification No. 2/2019 – CT (Rate). However, as stated above, these provisions as given under the notification have become irrelevant as the same have been incorporated in the Section itself read with the prescribed rules.

This circular has also become irrelevant for the same reasons as cited above i.e. the provisions and the clarifications given in the circular have already been incorporated in the Act and rules.

This clarification has already been added as an explanation to Section 10(1) and 10(2A) of the CGST Act, 2017.

Service providers other than restaurant/ caterers or traders/ manufacturers who are providing services exceeding 10% of the turnover in the state in preceding FY or Rs. 5,00,000 whichever is higher

b) The act has stated the threshold limit for opting for the scheme is Rs. 50 Lakhs (for all states). However, the power to increase such limit has been given to the Government.

The Govt. has notified (vide N/N 14/2019 – CT) the limit of Rs. 75 Lakhs for the following states:

Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. 

For all other states, the threshold limit is kept at the maximum of Rs. 1.5 Crore.

c) Aggregate turnover (ATO) shall not be more than the threshold limit of Rs. 75/150 Lakh in the preceding FY. 

ATO = Total of [Taxable outward supplies + Nil rated supplies + Exempted supplies under a notification + Non-taxable supply i.e. (Alcoholic liquor for human consumption + 5 Petro-products mentioned u/s 9) + exports + inter-state supplies] but shall exclude the amount of CGST, SGST, IGST,UTSGT or cess included in the turnover. 

Thus, it shall be noted that all the supplies made by the person shall be included in the calculation whether those supplies are taxable or exempted or even don’t attract GST at all! 

This total has to be calculated for all the persons who are doing business under the same PAN. In other words, a person who is doing his business from multiple states has to register in each separately as per the GST laws. For determining his ATO, turnover across all his registrations under the GST (which are under the same PAN) shall be totaled.

One may have a doubt in case where a person who has business established in one of the special category states and other states, say in Manipur and Maharashtra, what would be the ATO threshold for composition levy. Whether it would be Rs. 75L or 150L? In such cases, harmonious interpretation shall be done to ensure that both the conditions are satisfied. Therefore, in such cases the ATO threshold limit will be Rs. 75L.

d) Please note that the scheme is optional i.e. one may not pay tax under the composition scheme even if he is otherwise eligible to do so.

e) The tax payable u/s 10 is in lieu of tax payable u/s 9(1). Therefore, he is relieved of his tax liability as a normal taxpayer. (This insertion was just clarificatory in nature).

f) The rate and value on which tax shall be payable has been prescribed u/r 7 of the CGST Rules. However, the maximum rates and values have been prescribed under the section itself. The rates currently prescribed have been given below:

 *As per N/N 14/2019 – CT, the manufacturer of the following goods has been notified to be ineligible for composition levy:

Please note that the restriction is only for “manufacturers of notified goods”. Therefore, a person who is trading in such goods will still be allowed to opt for composition scheme. So, an ice-cream store owner near you may opt for composition scheme as he is not engaged in the manufacture of ice-creams but is just selling it. 

** Please note that in case of restaurant, there is no point of opting for the scheme as rate of tax applicable otherwise is 5% too. The only benefit being paying tax on a quarterly basis. However, those restaurants who are into the business of franchising their brands cannot opt for the scheme. 

It is important to understand the meaning of the term “turnover in the state or UT”. Turnover in the state or UT is nothing but ATO of that state. Simply put, it is:

Aggregate value of [ taxable outward supplies + Nil rated supplies + Exempted supplies under a notification + Non-taxable supply (Alcoholic liquor for human consumption + 5 Petroleum based products as mentioned u/s 9) + exports + inter-state supplies] made from that state but this shall exclude the amount of CGST,SGST,IGST,UTGST or cess included in such turnover.

Thus, for a manufacturer or a restaurant services supplier or a caterer, the tax shall be payable at a flat rate of 1% and 5% respectively on the amount of “turnover in the state” i.e. on all supplies whether those supplies are otherwise exempted or not is immaterial in such cases.

For example: Where a manufacturer who has opted for composition scheme manufactures two goods, one attracting a rate of 5% GST (Product A) and the other attracts nil rate of GST (Product B). Turnover of product A during the quarter being Rs. 10,00,000 and that of Product B being Rs. 4,00,000. He shall have to discharge a liability of Rs. 14,000 i.e. 1% of Rs. 14,00,000. He will not be allowed the benefit of paying composition tax only on the product which is otherwise taxable.

However, for other eligible suppliers i.e. traders, the tax has to be paid at the rate of 1% only on the amount of “taxable supplies”. Therefore, if they are supplying any goods/services which are exempted, then no tax has to be paid on those supplies. 

Continuing with the above example, suppose that manufacturer had made those sales to a trader who has opted for composition scheme and that trader made sales of Product A to the tune of Rs. 5,00,000 and Product B amounting to Rs. 2,00,000 during the quarter. The trader will only have to pay composition tax on his turnover of taxable supply i.e. Rs. 5000 (1% of 5,00,000).

**Section 10(2)(a) provides that a person who is a service provider is not eligible for option composition scheme under section 10(1). This is the reason that the term “other eligible suppliers” as mentioned in Rule 7 has been interpreted as “Traders”.

However, as there is a general practice in the Indian society of investing surplus amount with banks, there rose a problem of ineligibility being attracted as advancing money where consideration is received as interest/discount is considered as a supply of service, thereby covering a majority of persons under the ineligibility criteria who were otherwise eligible to opt for the scheme.

Also, there are certain manufacturers/traders who have to provide certain services which are necessary and incidental for their main supply. Even those persons were coming under the ineligibility criteria as they were providing services.

Therefore, for providing relaxation with respect to the above two problems, a proviso and an explanation was inserted wherein it was stated that a person may supply services (other than restaurant/caterer services as these are already allowed for composition scheme) up to 10% of turnover in the state or UT in the preceding FY or Rs. 50,00,000 whichever is higher.

Therefore, a manufacturer/trader may provide services up to the following limits:

Also, with an explanation it was clarified that while determining the amount of turnover in state for the purpose of determining the amount of services which can be supplied, the amount of interest/discount earned on account of extending deposits earned shall not be considered. This can be understood with the following example:

Another minute point with respect to the maximum amount up to which services can be rendered by a manufacturer/trader opting u/s 10(1) is that the 10% or Rs. 5,00,000 (whichever is higher) has to be seen with respect to turnover in the state/UT and not ATO. This point will be appreciated after looking at the following example: 

ATO of Mr. A during the PFY was Rs. 90,00,000. (Rs. 30,00,000 in M.P. and Rs. 60,00,000 in Maharashtra). If the 10% threshold was considered on the basis of ATO, then he would be eligible to provide services to the maximum of Rs. 9,00,000 (higher of 10% or 5,00,000). 

However, if turnover in the state/UT is considered, then he will be allowed to provide services amounting to Rs. 5,00,000 (higher of 10% or 5,00,000) in the state of M.P. and Rs. 6,00,000 (higher of 10% or 5,00,000) in the state of Maharashtra. Therefore, in totality, he will be allowed to provide services amounting to Rs. 11,00,000 which is Rs. 2,00,000 more than what he would’ve been allowed to provide if ATO was considered. 

Due care must be taken in this regard while calculating the threshold amount.

And Rule 5

(a) A service provider cannot opt for composition scheme u/s 10(1) except a restaurant/caterer or a manufacturer/trader providing services up to the threshold limits as discussed above (10% of T/O in the PFY or Rs. 5L whichever is higher)

(b) Cannot make non-taxable supplies i.e. a person who is engaged in the supply of alcoholic liquor for human consumption or any of the 5 petroleum products mention in section 9 (petroleum crude, high speed diesel, motor-spirit, natural gas and aviation turbine fuel) cannot opt for composition scheme for any of his other GST supplies.

(c) Cannot make inter-state outward supplies including stock transfers to own branches outside of the state as it is also a supply as per the GST law. However, there is no restriction on inter-state inward supplies.

(d) Cannot make supplies through an E-Commerce operator who is liable to collect tax at source u/s 52. Please note that he is still allowed to make supplies through an E-Commerce operator. He has only been barred from making supplies through an E-Commerce operator who is liable to collect tax at source u/s 52.

(e) Cannot manufacture notified goods. However, trading in those goods will not attract ineligibility. (as discussed above)

(f) Cannot register himself as a Casual taxable person or a Non-resident taxable person.

For example: If a composition taxable person registered in the state of Madhya Pradesh wants to set up an exhibition of his goods in Maharashtra, then normally he would have registered himself as a casual taxable person in Maharashtra for the duration of exhibition, discharge his liabilities there and got himself deregistered post the expiry of his registration as a casual taxable person. But in this case, if he wishes to opt for this option, then he will have to opt out of his composition taxable registration in the state of Madhya Pradesh and pay tax as a regular tax payer or he will have to register himself as a composition taxable person in the state of Maharashtra as well. But that would cause unnecessary burden as the basic purpose of obtaining registration was for the purpose of the exhibition post which there is no need of GST registration in Maharashtra.

Thus, we can see there are a lot of restrictions when opting for composition scheme.

(g) If a person wishes to avail the option to pay tax under the composition scheme in one state, then he will have to opt for the scheme for all his GST registrations under the same PAN. Therefore, all registrations will have to be either under composition scheme or as a regular tax payer.

(h) On the date of opting in the scheme, he shall not have any goods in stock which were purchased from an unregistered supplier and where he has such goods, then he shall pay tax under sub-section (4) of section 9 i.e. RCM on inward supplies from an unregistered dealer.

However, it must be noted that now section 9(4) has been amended to provide that RCM shall be applicable only in case of notified inward supplies from unregistered suppliers, therefore in view of such amendment in that section, this rule has become inapplicable until such inward supplies on which 9(4) will be applicable is notified. If the goods held in stock are one of those notified goods, then he will have to pay tax under RCM u/s 9(4).

(i) A composition taxable person has to issue a bill of supply i.e. he cannot issue a tax invoice as a tax invoice can only be issued by a person who is collecting tax. He shall also mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him.

(j) A composition taxable person shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.

10(2A), popularly known as composition scheme for service providers is a composition scheme for all those persons who are ineligible u/s 10(1) and 10(2) i.e. Service providers and manufacturers/traders providing services in excess of the aforementioned threshold limits.

It must be noted that when we talk about eligibility u/s 10(2A) being on the basis of ineligibility u/s 10(1) and 10(2), we are just talking about the services being provided in excess of the threshold limits as all other ineligibilities u/s 10(2) such as:

(i) engaged in making any supply of goods or services which are not leviable to tax under this Act;

(ii) engaged in making any inter-State outward supplies of goods or services;

(iii) engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52;

(iv) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and

(v) a casual taxable person or a non-resident taxable person, are equally applicable in case of composition scheme u/s 10(2A) as well.

a) This sub-section also begins with a non-obstante clause i.e. it overrides other provisions of the act but is subject to sub-section (3) and (4) of Section 9 i.e. he shall pay tax under Reverse Charge Mechanism on inward supplies (meaning thereby that the benefit of a flat rate of tax is only on outward supplies and not on inward supplies liable to reverse charge) 

b) The threshold limit of ATO for opting for the scheme is Rs. 50 Lakhs in the preceding FY (for all states). It must be noted that unlike 10(1), there is no provision for extending the limit of Rs. 50,00,000 to a higher amount by issuing a notification.

c) Alike section 10(1), this scheme is optional as well. The registered may or may not opt for the scheme.

d) Rate of composition tax: The section provides for the maximum rates that can be levied for persons opting u/s 10(2A). The maximum rate is 6% (3% CGST + 3% SGST/UTGST) on the amount of turnover in the state/UT. Please note that these are the maximum rates but the current rates have to be prescribed by means of rules. However, no rates have been prescribed under the rules yet. This seems to be a procedural lapse from the government which shall be rectified soon.

As there are no rules prescribed for rate of tax applicable in case of composition taxpayers opting u/s 10(2A), we need to have a look at the N/N 02/2019 – CT (Rate) as amended from time to time. That notification was issued much before the date from which section 10(2A) was made effective i.e. 1-1-2020, but the said notification contains the exact text and intent of section 10(2A). In that notification the rate notified for such persons was 6% (3% CGST + 3% SGST/UTSGT). So, to take a leaf out of that notification, we can gather the intent of the government of taxing such composition taxpayers u/s 10(2A) @ 6%. Due amendment in the rules shall come soon. 

In a nutshell, Notification 02/2019 – CT (R) has the same wording and intent which has later on being made effective by introducing section 10(2A). Scheme under that notification could not be given the name of composition scheme as such notification was not issued under the powers of Section 10 of the Act. But after the introduction of 10(2A), such scheme can be termed as composition scheme and all the rules and procedures as applicable to a composition taxpayer u/s 10(1) are equally applicable for 10(2A) cases as well.

Therefore, in view of introduction of Section 10(2A), the following notifications have become redundant subject to government prescribing the rules for rates of tax u/s 10(2A): 

(i) N/N 2/2019 – CT (R) as amended from time to time which notified such persons who are ineligible for composition scheme u/s 10(1) can opt to pay tax @ 6%. [Same provisions are now contained in sub-section 10(2A)]. 

(ii) N/N 21/2019 – CT as amended from time to time which notified the persons as mentioned in N/N 2/2019 to follow procedure for furnishing of return and payment of tax. [After introduction of 10(2A), the rules and procedures applicable to a composition taxpayer u/s 10(1) are equally applicable to composition taxpayer u/s 10(2A)] 

(iii) Circular No. 97/16/2019 as amended from time to time which also clarified the procedures and formalities for persons opting to pay tax under N/N 2/2019 – CT. [These procedures and formalities are now applicable to composition taxpayer u/s 10(2A) otherwise too] 

e) If a person wishes to avail the option to pay tax under the composition scheme u/s 10(2A) in one state, then he will have to opt for the scheme for all his GST registrations under the same PAN. Therefore, all registrations will have to be either under composition scheme or as a regular tax payer.

10(3):

The composition scheme shall lapse with effect from such date when his ATO exceeds the threshold limit i.e. 75L/150L for 10(1) and 50L for 10(2A).

Eligibility for opting composition scheme in current FY: ATO in PFY shall not exceed 75L/150L for 10(1) and 50L for 10(2A). 

Option shall lapse when: ATO in current FY exceeds 75L/150L for 10(1) and 50L for 10(2A).

10(4):

Composition taxpayers u/s 10(1) or 10(2A) shall not collect composition tax from their customers i.e. they have to pay tax from their own pocket and therefore cannot collect any amount in the name of tax from its customers. Because of this reason, they cannot issue a tax invoice and have to issue a Bill of supply instead.

10(5):

If it is found that a person who was ineligible to opt for the scheme had opted for the same, then, in addition to tax payable by him as per normal provisions, he shall also be liable to pay a penalty u/s 73 or 74 of the Act.

ATO and T/O in the state/UT shall not include the interest/discount earned on the exempted service of advancing deposits/loans.

Difference between ATO and T/O in the state/UT:

ATO shall be determined for the PFY and CFY as well.

ATO for PFY is for determining eligibility of opting for the scheme in the CFY.

ATO for CFY is for determining up to which date can a person pay tax under this scheme.

Turnover in the state/UT is only relevant for determining the amount of tax which has to be paid by the composition taxpayer. Also, this is important to determine the amount up to which services can be rendered by a manufacturer/trader opting u/s 10(1).

Therefore,

ATO shall include the supplies made from 01/04 of the FY up to the date till which such person becomes liable for registration.

Once, he becomes liable for registration or has voluntarily registered, then the role of T/O in the state/UT comes into the picture. T/O in the state/UT shall not include the amount of supplies from 01/04 till the date of him becoming liable to registration as tax has to be paid only on the amount of supplies made after becoming liable to registration/voluntary registration.

This can be understood with the help of following example for a manufacturer/trader (in Maharashtra) opting for the scheme u/s 10(1):

3(1), 3(4): Applicable for those persons who have migrated from earlier laws i.e. service tax/excise or VAT laws. [Irrelevant now as this was a transitional provision)

3(2): Applicable in case of fresh registration: A person who wishes to register himself as a composition taxpayer from the very beginning shall opt for the scheme in Part-B of FORM GST REG-01 and that shall be deemed to be an intimation for opting under the scheme i.e. no other intimation is required to be filed in such cases post registration is granted.

3(3): Applicable in case of those persons who are registered as normal taxpayers and who wish to shift to composition scheme: These persons shall file a FORM CMP-02 before the start of the FY in which they wish to pay tax under the composition scheme. In addition to the above form, they shall also file a statement in FORM GST ITC-03 within 60 days of the commencement of the FY for which such option has been exercised.

Thus, it can be said that a person (who is already registered) can opt-in to composition scheme only from the beginning of a FY.

ITC-03 is a statement containing details of the input tax credit in respect of inputs (in any form) or capital goods lying with such person on the date preceding the date from which he has to pay tax under the scheme i.e. on 31^st march of the PFY. This statement is required as the ITC with respect to such stock shall lapse as per the conditions and restrictions applicable to a composition taxpayer.

3(3A): Applicable in case of those persons who had migrated from earlier laws or had registered themselves as a normal taxpayer after introduction of GST and who wish to convert into a composition taxpayer during the FY 2017-18: This provision was introduced as FORM CMP-01 was not available on the portal and persons who were willing to register themselves as composition taxpayer were not able to do so during the initial days of GST. [This rule is also irrelevant now]

3(5): Intimation for opting composition scheme: Intimation with respect to a place of business shall be deemed to be intimation for all the registrations under the same PAN. Therefore, separate intimations need not be filed for each registration.

Please note that once a person has filed an intimation and he wants to continue being a composition tax payer, he does not need to file an intimation every year provided he is eligible for continuing as a composition taxpayer.

Intimation in case of person opting to shift to composition scheme i.e. u/r 3(3): Effective date shall be 01/04 of the FY for which such option is exercised.

In case of fresh registration i.e. u/r 3(2): Effective date shall be the effective date of grant of registration. The effective date of grant of registration shall depend on when was the application for registration filed.

a) Where the application for registration is filed within 30 days of becoming liable to register: In such case effective date of registration and therefore composition levy shall be the date of becoming liable for registration.

E.g.: Liability to register: 01/02/2020

Date of filing for registration: 20/02/2020

Date of grant of registration: 22/02/2020

In this case, date of registration shall be 01/02/2020 and therefore, effective date of composition levy shall be 01/02/2020 as well.

b) Where the application for registration is filed after 30 days: In such case effective date of registration shall be the date of grant of registration.

E.g.: Liability to register: 01/02/2020

Date of filing for registration: 03/03/2020

Date of grant of registration: 06/03/2020

In this case, date of registration shall be 06/03/2020 and therefore, effective date of composition levy shall be 06/03/2020.

6(1): Validity of composition levy will be till he continues to fulfill the conditions and restrictions required as have been discussed above.

6(2): Where a person ceases to fulfill the conditions and restrictions as are required to be adhered to by a composition taxpayer, say his ATO exceeds the threshold limit or he makes an inter-state supply etc. he shall file an intimation of opting out of the scheme in FORM GST CMP-04 within 7 days from such date and shall issue tax invoice with respect to each supply made after he ceases to fulfill the said conditions and restrictions.

For example: ATO of a composition taxpayer u/s 10(2A) exceeds Rs. 50L on 20/02/2020. He shall issue a tax invoice for each supply from thereon and also file a CMP-04 within 7 days i.e. 27/02/2020 to intimate the department that he has opted out of the scheme.

6(3): Where a person who wants to opt out of the scheme voluntarily i.e., he has not violated any conditions/restrictions, he shall file an intimation in FORM GST CMP-04 before such withdrawal.

For example: Where a person wants to opt out of the scheme from 10/04/2020, then he has to file a CMP-04 on or before 09/04/2020. He can then proceed to issue tax invoices and pay tax as a regular taxpayer.

As per Circular No. 77/51/2018 – GST dated 31-12-2018, it has been clarified that such option can be from any date but shall not be before the beginning of the FY in which such option to opt out has been exercised.

Continuing with the above example, the date in CMP-04 can be any date but not prior to 01/04/2020.

6(4) and 6(5): Option to pay tax u/s 10 denied upon action by proper officer:

(i) Proper officer is of the view that such person was not eligible for composition scheme or has contravened the provisions after being eligible, then the officer may issue a SCN (Show Cause Notice) in FORM GST CMP-05 as to why option to pay tax u/s 10 shall not be denied.

(ii) Within 15 days of receipt of such notice, the composition taxpayer has to reply in FORM GST CMP-06.

(iii) Within 30 days of receipt of reply in CMP-06, the officer shall pass his order in FORM GST CMP-07 either accepting the contention or denying the option u/s 10.

Where, he denies the option to pay tax u/s 10, such denial may be from the initial date (where the person was ineligible from the very beginning) or from such date when he contravenes the conditions or restrictions (where contravention is at a date after opting for section 10).

6(6): Requirement after opting out/denial of Section 10:

As we discussed earlier, where a person who opted for the scheme had to furnish a statement in FORM GST ITC-03 to declare the ITC with respect to stock lying with such person as on date of opting for the scheme. This was done with an intent to remove all the ITC from the credit of such person as he would not be entitled to claim ITC once he started to pay tax as a composition tax payer.

On similar grounds, once a person is out of the composition scheme, he will pay tax as a regular taxpayer and shall be liable to collect tax on his outward supplies and claim ITC on inward supplies. Therefore, he shall be allowed the benefit of ITC on the stock lying with him as on date he starts paying tax as a regular taxpayer.

Therefore, rule 6(6) gives an option to all such persons who have opted out or being denied to pay tax u/s 10 that they can file a FORM GST ITC-01 to avail the benefit of ITC on the stock lying with them as on date of opting out/denial to pay tax u/s 10. This form shall be filed within 30 days of filing CMP-04 or passing of order in form CMP-07 as the case maybe.

*A minute point to be noted is that the lawmaker has used the word “shall” with reference to ITC-03 and the word “may” with reference to ITC-01 indicating that filing of ITC-03 is mandatory whereas filing of ITC-01 is optional. The reason being that ITC-03 is for the benefit of the government as it zeroes the ITC balance of the taxpayer whereas ITC-01 is for the benefit of the taxpayer as he can claim the ITC on stocks lying with him.

6(7): Intimation in CMP-04 for any place of business or order in CMP-07 for any place of business shall be construed as opting out or denial of the option to pay tax u/s 10 for all the place of business registered on the same PAN.

62(1)(i): All composition taxpayers shall file a statement in FORM GST CMP – 08 on a quarterly basis till 18^th of the month following the quarter.

Therefore, the default due dates for CMP – 08 are as follows:

Apr-Jun: 18^th July

Jul-Sep: 18^th Oct

Oct-Dec: 18^th Jan

Jan-Mar: 18^th Apr

62(1)(ii): All composition taxpayers shall file a return in FORM GSTR-4 till 30^th April of the following year. Earlier GSTR-4 was required to be filed on a quarterly basis but to ease the compliance, this requirement has been shifted from quarterly to annual basis.

62(2): CMP-08 shall be a simple form wherein the composition taxpayer can declare his turnover in the state/UT and discharge his tax liabilities (including tax on reverse charge) along with interest by debiting the electronic cash ledger. (As he cannot have any balance in the electronic credit ledger).

62(3): GSTR-4 (which is to be filed on an annual basis now) shall contain the following details:

Thus, a composition taxpayer has to maintain details of his purchases invoice wise and supplier wise so that he can furnish his return in FORM GSTR-4. However, only the total amount of supplies made by him have to be declared in GSTR-4.

62(4): Fulfil the compliances required of regular tax payer where a person has opted to pay tax under the composition scheme from the beginning of a financial year: A person who has shifted from being a regular tax payer to a composition taxpayer from the beginning of  FY, then he has to furnish all the details u/r 59,60,61 (i.e. relating to outward supplies, inward supplies and monthly return) till the due date of filing return for the month of September or actual date of filing annual return, whichever is earlier.

For example: Mr. A was a composition tax payer for the FY 2019-20. He filed a CMP-04 on 28/03/2020 intimating that he wishes to pay tax as a regular taxpayer from FY 2020-21 onwards. He shall file all his pending returns for the FY 19-20 till 20^th October or date of actual filing of annual return (whichever is earlier).

62(5): Where a person who opts out of the scheme voluntarily or upon ceasing to fulfill the conditions/ denied the benefit upon action of officer, he still has to furnish CMP-08 and GSTR-4 for the period for which he was a composition taxpayer till the due dates as discussed above.

For example: Mr. A is a composition taxpayer till 17/08/2019 after which he filed a CMP-04 intimating the department of opting out of the scheme. In this case he has to file CMP-08 for the quarters Apr-Jun (till 18^th July) and Jul-17^th August (till 18^th October) and has to file GSTR-4 for this period till 30/04/2020.

62(6): This rule is applicable for persons who have opted to pay tax by taking benefit under notification 2/2019 – CT. Therefore, this rule is irrelevant for the reasons as discussed previously in this article.