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WITHDRAWAL FROM COMPOSITION SCHEME

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WITHDRAWAL FROM COMPOSITION SCHEME






Introduction



The registered taxpayer who intends to withdraw from the composition scheme is required to file an intimation for withdrawal in FORM GST CMP-04 within seven days of the occurrence of any event that makes the business ineligible for the GST composition levy.




Reasons for withdrawal



A taxpayer can withdraw from the Composition Levy at any time of the financial year for the below following reasons:

  • Voluntary withdrawal
  • If exceeding the threshold limit as defined in Section 10 of the CGST Act
  • Supplying restaurant services other than as mentioned under the clause of GST Act
  • Supply of Goods not liable to Tax ? goods and services you are supplying become exempt
  • Supplying of goods through E-Commerce Operator
  • Manufacturing Notified Goods
  • Others


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Effective date of withdrawal



By Taxpayer:
When the composition scheme taxpayer has himself opted for the withdrawal from the composition scheme, the effective date in such case would be:

  • The date indicated by the taxpayer in his intimation or application filed by him in FORM GST CMP-04.

It has been clarified that the date indicated in the form should not be prior to the commencement of the financial year in which such intimation or application for withdrawal is being filed.

By Tax Authorities:
When the withdrawal from the composition scheme has been initiated by the tax authorities, the effective date in such case would be:

  • The date as determined by the tax authorities would be the effective date. The tax authorities can even determine any retrospective date, however, the date cannot be prior to the date of contravention of the provisions of the Central Goods and Service Tax Act or the Central Goods and Service Tax Rules.
     


Online application procedure



1

Firstly, the taxpayers have to visit the Goods and Services Tax portal to apply for the Withdrawal from Composition Levy online.

2

Click on the 'Login' button to access the username and password page.

3

Enter the correct 'Username' and 'Password' credentials along with the captcha in the required field and click 'login'.

4

After logging in, select 'Application for withdrawal from Composition Levy' from the Registration Menu under the 'service' tab that is visible on the home page.

5

Select the date from which the withdrawal from Composition Levy is sought using the calendar.

6

Then select the Reason for withdrawal from Composition Levy from the drop-down list.

7

Before submitting the application, also check the box for the Verification process (below the Composition Declaration) that states that all the information given is true and that nothing has been concealed from the authority.

8

Finally, select the Authorized Signatory from the drop-down menu.

9

Enter the place where the application is filed, in the Place field.

10

Also click the 'save' button to save the application form and retrieve it later.

11

Upon selecting the Authorized Signatory and the Place, only then the options to submit the form will get activated.

12

Sign the form by using either the Digital Signature Certificate (DSC) or the EVC option. On selecting any of these below options, OTP will be received.

13

If using a DSC, select the registered DSC from the emSigner pop-up screen and then proceed from there accordingly.

14

Enter the OTP that has been received and then click on the Validate OTP button.

15

The user will get a prompt to confirm the action, click on Proceed to move forward.

16

On successfully filing the application for cancellation of registration, the system will generate the ARN and display a confirmation message.

17

GST Portal will also send a confirmation message on the registered mobile phone number and e-mail-ID.


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