Under what circumstances will the composition tax be withdrawn in the current financial year?

In case of the below circumstances, the Composition levy shall stand withdrawn. The GST tax shall become payable at regular rates from the day such disallowance or circumstances mentioned below gets attracted:

1. If the value of aggregate turnover in the current financial year crosses one crore fifty lakh rupees whereas seventy-five lakh rupees for specific category states and fifty lakh rupees for the supplier of other services who have opted for the composition levy u/s 10(2A)

2. If one of the transactions mentioned below takes place in the current financial year before crossing the aggregate turnover of one crore fifty lakh rupees or seventy-five lakh rupees for specific category states, then on the day on which such transaction takes place, the benefit of composition levy on the same day is withdrawn, although no such transaction took place in the preceding financial year

  • Supply of services exceeding the limits prescribed
  • Supply of non-taxable goods (petroleum crude, high-speed diesel, motor spirit, natural gas, and aviation turbine fuel)
  • Inter-state outward supply of goods
  • Casual Taxable person
  • Non- resident taxable person

3. If any of the above circumstances occur for a separately registered branch or vertical businesses under the same PAN, the composition levy withdrawn applies to all branches and vertical businesses

Can a person who has chosen the composition scheme voluntarily opt-out?

A person can opt out of the composition levy voluntarily even though he has not violated any conditions or restrictions during the year. Provided that once he does, so he shall not be eligible for opting the composition scheme again during the same financial year. In such a case, he shall file an intimation in the form GST CMP- 04 before such withdrawal.

What are the steps to withdraw from the Composition levy?

Following are steps to opt-out from composition levy on GST Portal

  • Login to GST portal https://gst.gov.in
  • Go to services tab→ Registrations→ Application for withdrawal from the composition levy
  • Fill out the requisite details
  • Submit the application form