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Procedure for Submitting GST Form CMP-02 Online

This article outlines the process for taxpayers to file Form GST CMP-02 on the GST Portal, enabling them to opt into the Composition Scheme. It details the steps for online submission, including logging in, navigating to the correct application, and completing the declaration and verification. The guide also mentions specific submission requirements for companies and LLPs, along with important past deadlines for opting into the scheme.

📖 2 min read read🏷️ Composition Scheme

Businesses electing to register under the Goods and Services Tax (GST) Composition Scheme must notify the government. This notification is completed by submitting either Form GST CMP-01 or Form GST CMP-02. Form CMP-01 was intended for taxpayers migrating to GST who wished to select the Composition Scheme, with a past deadline of August 1, 2017. For current taxpayers wishing to join the Composition Scheme at the start or during a financial year, Form GST CMP-02 must be filed. If CMP-02 is submitted mid-financial year, the scheme's provisions become effective from the month immediately following the filing month. For instance, if a taxpayer submits CMP-02 in December 2017, the Composition Scheme rules would apply starting January 2018. Both CMP-01 and CMP-02 are required to be filed electronically via the GST Portal, and the submission procedure is identical.

Recent Updates

February 6, 2023: Taxpayers eligible for or seeking to join the Composition Scheme for the fiscal year 2023-24 must file a declaration using Form CMP-02 on the GST portal by March 31, 2023.

February 24, 2022: Individuals and entities opting for the Composition Scheme for the fiscal year 2022-23 were required to submit their declaration through Form CMP-02 on the GST portal by March 31, 2022.

March 23, 2021: The deadline for submitting Form CMP-02 to maintain eligibility under the composition scheme for the fiscal year 2021-22 was March 31, 2021.

February 15, 2021: The window to opt into the composition scheme for the fiscal year 2021-22 using Form CMP-02 closed on March 31, 2021. The GST portal made the option to join the composition scheme available to taxpayers.

Detailed Steps to File GST Form CMP-02 on the GST Portal

Step 1: Access the GST Portal by logging in.

Step 2: Navigate to 'Services,' then 'Registration,' and select 'Application to Opt for Composition Levy.'

Step 3: Review the 'Composition Declaration' and 'Verification' sections on the screen, then select the checkbox to confirm. From the dropdown menu, choose the 'Name of Authorized Signatory,' enter the 'Place,' and click 'SAVE.'

Step 4: Companies and Limited Liability Partnerships (LLPs) must submit this application using a Digital Signature Certificate (DSC). Other types of registrants have three available methods for submission.

Step 5: A warning pop-up will appear; click 'PROCEED' to continue.

After successful submission, a confirmation message will be shown. An acknowledgment will also be sent to your registered email address and mobile number.

Following the submission of this form, a registered composition dealer is required to file GST CMP-03 within 90 days.

Frequently Asked Questions

What is the GST Composition Scheme?
The GST Composition Scheme is an alternative method of GST compliance for small taxpayers, allowing them to pay GST at a fixed percentage of their turnover instead of the regular GST system, which involves detailed invoicing and input tax credit claims.
Who is eligible to opt for the Composition Scheme under GST?
Businesses with an annual turnover below a specified threshold (currently Rs 1.5 crore for most states and Rs 75 lakhs for special category states) are eligible. Certain businesses, such as manufacturers of specific goods, inter-state suppliers, and e-commerce operators, are excluded.
What are the benefits of choosing the GST Composition Scheme?
Key benefits include reduced compliance burden with simpler return filing (quarterly GSTR-4 and annual GSTR-9A), lower tax liability due to fixed rates, and fewer record-keeping requirements.
Are there any restrictions for businesses under the Composition Scheme?
Yes, businesses under the Composition Scheme cannot claim Input Tax Credit (ITC), cannot make inter-state supplies, and cannot supply goods notifiable under Section 10(2)(d) of the CGST Act. They also cannot issue tax invoices.
How often do Composition Scheme dealers need to file returns?
Dealers registered under the Composition Scheme are generally required to file a quarterly statement (FORM GST CMP-08) and an annual return (FORM GSTR-4).
What is the primary purpose of GST Form CMP-02?
GST Form CMP-02 is used by a taxpayer to inform the GST authorities about their decision to opt into the Composition Scheme for a particular financial year or during the middle of a financial year.
When does the Composition Scheme become applicable if CMP-02 is filed mid-year?
If Form CMP-02 is filed in the middle of a financial year, the rules and benefits of the Composition Scheme become applicable from the month immediately succeeding the month in which the form was filed.