GSTN has recently issued an advisory for taxpayers opting for Composition Scheme for the Financial for Year 2020-21.

Considering the present scenario in the country with COVID-19 outbreak, the government has extended the dates for opting of composition scheme by normal taxpayers to 30th June 2020 for FY 2020-21. This decision has come as a relief measure for the challenges faced by the regular tax-payers. For the financial year 2020-21, the changes have been notified in Notifications 30/2020 Central Tax, dated 03.04.2020. Another circular has also been issued which is – Circular No. 136/06/2020-GST dated 3rd April, 2020.

A. Changes to Previous Advisory

Here are the changes for the regular taxpayers who wish to opt-in for Composition Scheme in Financial Year 2020-21:

• Changed date to file Form GST CMP 02: All the regular tax-payers (registered) who wish to opt-in for Composition Scheme in the Financial Year 2020-21 may apply by filling the GST CMP-02 form by 30th June, 2020.
• No need to fill GSTR 1 or 3B for PAN Association in 2020-21: All the regular taxpayers must note that they SHOULD NOT file any GSTR-1/GSTR-3B, for any tax period of Financial Year 2020-21. If this change is not followed, they will NOT be able to opt for composition scheme for the Financial Year 2020-21.
• Re-option is Not Necessary: For all the tax-payers who are already in the Composition Scheme of the previous Financial Year need not opt-in again for the Financial Year 2020-21.
• Changed date to file Form-GST ITC 03: The revised date to fill Form GST ITC-03 to reverse ITC for the stock in hand at the time of transition is 31st July 2020.
• Change in the previous advisory date 18.02.2020: There is a modification on the advisory issued on 18.02.2020. It is available on the GST Portal.

B. Return /Payment

All taxpayers opting in for composition shall file FORM GST CMP-08 quarterly and pay GST and shall file GSTR-4 annually.

C. Eligible taxpayers for Composition Scheme

Following taxpayers may opt for this scheme:

• The normal taxpayers having aggregate turnover (at PAN level) below Rs. 1.5 Crore in the previous financial year, who doesn’t want to avail ITC facility,
• The normal taxpayers having aggregate turnover (at PAN level) below Rs. 75 lakh in the previous financial year who are situated in following states:
  1. Arunachal Pradesh,
  2. Manipur,
  3. Meghalaya,
  4. Mizoram,
  5. Nagaland,
  6. Sikkim,
  7. Tripura and
  8. Uttarakhand:
• The normal taxpayers supplying services and/or mixed supplies having aggregate turnover of last financial year below Rs. 50 lakhs.

D. Taxpayers who cannot opt for composition scheme

• 1. Suppliers of the goods/services who are not liable to be taxed under GST,
  2. Inter-State outward suppliers of goods/services,
  3. The taxpayers supplying through e-commerce operators, who are required to collect tax under section 52,
  4. The manufacturers of notified goods like (i) Ice cream and other edible ice, whether or not containing cocoa, (ii) All goods, i.e. Tobacco and manufactured tobacco substitutes and (iii) Pan Masala, (iv) Aerated water
  5. A Casual taxpayer,
  6. A Non-Resident Foreign Taxpayer,
  7. A person registered as Input Service Distributor (ISD),
  8. A person registered as TDS Deductor /Tax Collector

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