How To Opt-In For Composition Scheme For The Financial Year 2021-22?

Prakash Matre
Prakash Matre at January 06, 2023

Regular GST registered Taxpayers who don’t want to avail ITC facility and who have an aggregate annual domestic PAN-based turnover as per the following limits can opt for the Composition Levy under GST: In this article, we'll discuss how to opt composition scheme in GST for 2021-22, how to opt for composition scheme, how to change regular to composition in GST 2021, how to change regular to composition in GST 2022 last date to opt for composition scheme for 2021-22, etc.

In this article, we'll cover topics like GST composition limit for fy 2021-22, GST composition scheme turnover limit 2021-22, last date to opt for composition scheme for 2022-23, GST regular to composition change, how to change composition to regular in gst 2021, how to change composition to regular last date in GST 2021 and much more.

  • Up to INR 1.5 Crores (in the previous FY),
  • Up to INR 75 lakhs (in the previous FY) for Taxpayers who are registered in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura & Uttarakhand,
  • Up to INR 50 lakhs (in the previous FY) for Taxpayers supplying services and/or mixed supplies.

However, you cannot opt for the Composition Levy if you are/you undertake:

  • Any supply of goods that are not liable to be taxed under the GST Act,
  • Inter-state outward supply 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.

GST Rates For A Composition Dealer

The GST rates for various Composition Dealers are as follows:

Type of Business CGST SGST Total
Manufacturers and Traders (Goods) 0.50% 0.50% 1.00%
Restaurants not serving alcohol 2.50% 2.50% 5.00%
Other Service Providers 3.00% 3.00% 6.00%

How To Opt-In Composition Scheme Financial Year 2021-22?

The eligible GST registered Taxpayers who want to opt-in for the Composition Scheme for the FY 2021-22 have to file FORM GST CMP-02 on or before 31 March 2021 which is the last date to opt-out for the composition scheme for 2021-22. To file this form, the Taxpayer has to take the following steps: Step 1: Login on the GST Portal. Step 2: Under ‘Services’, select ‘Registration’ and then ‘Application to Opt for Composition Levy’. Composition Scheme You will be redirected 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 auto-populated and displayed on the screen. Composition Scheme The Nature of Business and Jurisdiction will be listed as well. Composition Scheme Step 3: In the ‘Composition Declaration’ section, you will have to pledge to abide by the conditions and restrictions applicable to Taxpayers under the Composition Levy. Composition Scheme Step 4: Check the box in the ‘Verification’ section to proceed. Composition Scheme Step 5: Select the Authorized Signatory from the drop-down menu and enter the Place. Composition Scheme Step 6: Once the Authorized Signatory is selected, and the Place is entered, the options to submit the form will get activated. Select the desired mode and sign the application/form:

  • Submit with DSC,
  • Submit with E-sign, or
  • Submit with EVC

Once the application/form is successfully signed and submitted, the system will perform some validations at the back-end. If these are successful, an ARN will be generated and sent to the registered email address and mobile number (SMS) within the next 15 minutes.

Points To Remember

  • Once the Form GST CMP-02 application is filed and accepted, the Composition Scheme will be available to the Taxpayer, w.e.f. 1 April 2021.
  • The taxpayers who already have opted for the Opt-In Composition Scheme Financial Year 2021-22.

Taxpayers who were regular Taxpayers in the previous FY, but are opting-in for the composition scheme for 2021-22, should file Form GST ITC-03 for reversal of ITC on stocks of inputs, semi-finished goods, and finished goods available with them within 60 days from the effective date of opting in

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