GST Regular to Composition Scheme
A taxpayer registered under the regular GST scheme has the option to switch to the composition scheme, subject to certain conditions. Here's how a taxpayer can switch from the regular GST scheme to the composition scheme:
Eligibility: The taxpayer must be eligible to opt for the composition scheme. Under the GST law, taxpayers who are engaged in the supply of goods, have an annual turnover of up to Rs. 1.5 crore, and do not engage in interstate supply or the supply of exempted goods are eligible for the composition scheme.
Intimation: The taxpayer must file an intimation in Form GST CMP-02 on the GST portal, within the specified time limit.
Payment of Tax: The taxpayer must pay the tax liability for the current tax period and clear any pending dues under the regular GST scheme before switching to the composition scheme.
Filing Form GST ITC-03: The taxpayer must file Form GST ITC-03 on the GST portal, within 60 days from the date of the switch, to declare any input tax credit (ITC) which they have claimed under the regular GST scheme but are not eligible for under the composition scheme.
Revised Invoices: The taxpayer must issue revised invoices for any supplies made during the tax period but were pending at the time of the switch to the composition scheme.
Quarterly Return Filing: After switching to the composition scheme, the taxpayer must file quarterly returns in Form GST CMP-08, instead of monthly returns under the regular GST scheme.
It is important to note that once the taxpayer opts for the composition scheme, they cannot claim any ITC on their purchases and must pay tax at a fixed rate as prescribed under the scheme. Additionally, if the taxpayer is found to be ineligible for the composition scheme or has violated any conditions, their registration may be cancelled, and they may be required to pay additional tax along with penalty and interest. Therefore, it is advisable to seek professional help if necessary to ensure compliance with GST regulations.