CMP-08 › Join or leave

Joining and leaving the composition scheme

You choose the scheme once a year, but crossing the turnover limit takes you out at once. Here are the forms and dates.

Joining

• A new business can choose composition in its registration application.
• An existing regular taxpayer files GST CMP-02 on the portal before the start of the financial year (Rule 3). The scheme applies from 1 April.
• Within 60 days of the year starting, file ITC-03 to reverse the input tax credit on stock in hand.

Leaving because turnover crossed the limit

1. The day turnover crosses ₹1.5 crore (or ₹75 lakh / ₹50 lakh), you are out of the scheme.
2. File GST CMP-04 within 7 days (Rule 6).
3. From that day issue tax invoices, charge GST and file GSTR-1 and GSTR-3B.
4. File ITC-01 within 30 days to take credit on stock in hand on the day before (section 18(1)(c), Rule 40).
5. File CMP-08 for the part of the quarter you were in the scheme, and GSTR-4 for that year.

The limit bar on the CMP-08 working warns you when this year's turnover passes 80% of the limit.

Leaving by choice

You can leave at any time by filing CMP-04 before the date you want to switch. Many businesses switch when their buyers start asking for tax invoices so they can take input tax credit.