GSTN Advisory for Composition Taxpayer FY 2020-21 I CA Satbir Singh
Advisory on Opting-in for Composition Scheme for 2020-21 – Extension of Dates in view of COVID-19 pandemic
A.Due to COVID-19 pandemic and challenges faced by taxpayers, Government has extended dates for opting for composition scheme by normal taxpayers, for the financial year 2020-21. These are notified in Notifications 30/2020 Central Tax, dated 03.04.2020. Circular No. 136/06/2020-GST dated 3rd April, 2020 has also been issued.
B.Existing Normal taxpayers who want to opt for Composition Scheme in Financial Year 2020-21 may note following changes:
- Revised date to file Form GST CMP 02: Normal and registered taxpayers who want to opt in for Composition in FY 2020-21 can apply in Form GST CMP-02 by 30th June 2020.
- No GSTR 1 or 3B must be filed in 2020-21 financial year for associated PAN: The taxpayers SHOULD NOT file any GSTR-1/GSTR-3B, for any tax period of FY 2020-21, from any of the GSTIN on the associated PAN, or else they will not be able to opt for composition scheme for FY 2020-21.
- No need for re-opting for the composition scheme: The taxpayers who are already in composition scheme, in previous financial year are not required to opt in for composition again for FY 2020-2021.
- Revised date to file Form GST ITC 03: Form GST ITC-03 to reverse ITC for the stock in hand at the time of transition can be filed till 31st July, 2020.
- Modification in earlier advisory date 18.02.2020: The advisory issued on 18.02.2020 and available on GST Portal (click here for the link https://www.gst.gov.in/newsandupdates/read/356) stands modified to above extent.
Advisory on Opting-in Composition Scheme for 2020-21 by filing FORM GST CMP-02
A. How to opt-in Composition Scheme:
- The application for opting-in composition scheme for the financial year, 2020-21 has been made available on GST Portal.
- The taxpayers who are already in composition scheme in previous financial year are not required to opt in for composition again for FY 2020-2021.
- The eligible registered taxpayers, who want to opt-in for composition scheme for the Financial Year 2020-2021, may file FORM GST CMP-02 application up to 31st March, 2020 on common portal.
- The taxpayers should navigate as follows:
- Log-in>Services > Registration > Application to opt for Composition Levy>filing form GST CMP-02>file application under DSC/EVC.
- Once CMP-02 application is filed, the composition scheme shall be available to the taxpayer w.e.f. 1st April 2020.
- The taxpayers who were a regular taxpayers in previous financial year but are opting-in composition scheme for 2020-21 should file ITC-03 for reversal of ITC credit on stocks of Inputs, semi-finished goods and finished goods available with him within a period as prescribed under Rule, 3(3A) of CGST Rules, 2017.
- For more information taxpayers may consult user-manual available at GST Portal. Following links may also be used for opening user manual: https://tutorial.gst.gov.in/userguide/compositionpoc/index.htm
B. Return /PaymentAll taxpayers opting in for composition shall file FORM GST CMP-08 quarterly and pay GST and shall file GSTR-4 annually.
C. Who are eligible taxpayers for opting-in for Composition Scheme:-
Following taxpayers may opt for this scheme:
- The normal taxpayers having aggregate turnover (at PAN level) below Rs. 1.5 Crore in the previous financial year, who doesn’t want to avail ITC facility,
- The normal taxpayers having aggregate turnover (at PAN level) below Rs. 75 lakh in the previous financial year who are situated in following states:
- Arunachal Pradesh,
- Tripura and
- The normal taxpayers supplying services and/or mixed supplies having aggregate turnover of last financial year below Rs. 50 lakhs.
D. Taxpayers, who are not eligible for opting in composition scheme:
- Suppliers of the goods/services who are not liable to be taxed under GST,
- Inter-State outward suppliers of goods/services,
- The taxpayers supplying through e-commerce operators, who are required to collect tax under section 52,
- The manufacturers of notified goods like (i) Ice cream and other edible ice, whether or not containing cocoa, (ii) All goods, i.e. Tobacco and manufactured tobacco substitutes and (iii) Pan Masala, (iv) Aerated water
- A Casual taxpayer,
- A Non-Resident Foreign Taxpayer,
- A person registered as Input Service Distributor (ISD),
- A person registered as TDS Deductor /Tax Collector,