Circular No.: 97/16/2019-GST
Date of Circular: 5th April 2019
Corrigendum Date: 1st July 2019
Relevant Sections and Rules:
- CGST Act, 2017:
- Section 10: Composition levy
- Section 168(1): Power to issue instructions
- CGST Rules, 2017:
- Rule 3(3): Intimation for opting into composition scheme
- Rule 3(3A): Conditions for suppliers eligible for new composition scheme
- Rule 3(4): Effective date of composition
- Rule 6(2): Withdrawal from composition
- Notifications Referenced:
- Notification No. 2/2019-Central Tax (Rate) dated 7.03.2019
Summary of Circular:
This circular provides procedural clarification on how a registered person can opt for the new composition scheme under Notification No. 2/2019-CT(R) which allows suppliers of services (or mixed suppliers) to pay GST at 6% (3% CGST + 3% SGST).
- Opting into New Composition Scheme (Notification No. 2/2019-CT(R)):
- Eligibility: Any registered person not eligible under existing composition scheme (Section 10(1) & (2)), but eligible under the new service supplier scheme.
- Procedure:
- File FORM GST CMP-02 by selecting “Any other supplier eligible for composition levy” (Sl. No. 5(iii)).
- Also file FORM GST ITC-03 for reversal of ITC as per Rule 3(3A).
- Due Date Correction (via Corrigendum):
- Original due date: 30th April 2019
- Revised due date: 31st July 2019 for opting into the scheme for FY 2019–20.
- Effective Date of Scheme:
- Once CMP-02 is filed, the option becomes effective from the beginning of the financial year (i.e., 1st April 2019).
- Transition into Scheme:
- If taxpayer was previously a normal taxable person:
- Must reverse ITC using FORM ITC-03.
- Supplies made before filing CMP-02 must be reported in regular returns (e.g., GSTR-1, 3B).
- Post-option, start filing GSTR-4.
