GST Compliance – Withdrawal from Composition Levy (CMP-04)

Withdrawal from Composition Levy (Form GST CMP-04)

Edition: September 2025
Disclaimer: This manual is for compliance facilitation. It does not substitute statutory provisions, notifications, or circulars. Taxpayers must verify with the CGST/SGST Acts, Rules, and GSTN updates.

✍️ Preface

The Composition Levy simplifies compliance for small taxpayers. However, if turnover exceeds the threshold or the taxpayer no longer meets eligibility conditions, they must withdraw from the scheme by filing Form GST CMP-04 on the GST Portal.

This manual consolidates the law, conditions for withdrawal, step-by-step filing process, timelines, FAQs with statutory basis, and a compliance checklist.

📑 Table of Contents

1. Law Governing Withdrawal from Composition Levy

2. When to Withdraw?

3. Step-by-Step Process to File CMP-04

4. Post-Withdrawal Obligations

5. FAQs (with Basis)

6. Compliance Checklist (Fillable Format)

⚖️ 1. Law Governing Withdrawal from Composition Levy

• Section 10, CGST Act, 2017 – Composition Levy.

• Section 25, CGST Act, 2017 – Registration provisions.

• Rule 6, CGST Rules, 2017 – Procedure for withdrawal from composition levy.

• Form GST CMP-04 – Prescribed form for withdrawal.

🎯 2. When to Withdraw?

As per FAQs:

• Voluntary withdrawal.

• Annual turnover exceeds threshold limit.

• Engaged in supply of exempt or non-taxable goods.

• Engaged in inter-state supply.

• Supply through e-commerce operator under Sec. 52.

• Manufacture of notified goods (e.g., Pan Masala).

• Any other reason notified.

Withdrawal must be filed within 7 days from the date of ineligibility.

🛠️ 3. Step-by-Step Process to File CMP-04

1. Login: www.gst.gov.in → Login with GSTIN & credentials.

2. Navigate: Services > Registration > Application for Withdrawal from Composition Levy.

3. Select Date of withdrawal (cannot precede date of opting into composition).

4. Select Reason for withdrawal from dropdown.

5. Verification tab → Tick declaration.

6. Select Authorized Signatory → Enter Place of filing.

7. Save → Submit with DSC/EVC:

   • DSC: Select certificate & sign.

   • EVC: OTP sent to registered mobile/email.

8. Success message displayed → ARN sent by SMS/email within 15 minutes.

9. Status auto-updated to Regular Taxpayer.

📌 4. Post-Withdrawal Obligations

• File Form ITC-01 within 30 days, declaring stock of inputs, semi-finished, and finished goods to claim ITC.

• File returns as applicable to Regular Taxpayers (GSTR-1, GSTR-3B, etc.).

❓ 5. FAQs (with Basis)

Q1. Can I withdraw voluntarily from Composition Levy?
Yes, at any time. (FAQ 1)

Q2. Which form to file?
Form GST CMP-04. (FAQ 4)

Q3. Do I need officer approval?
No, application is auto-approved. (FAQ 5)

Q4. Is stock intimation mandatory?
Yes, ITC-01 to be filed within 30 days. (FAQ 6)

Q5. Can I withdraw retrospectively?
Yes, subject to conditions:

• Voluntary withdrawal → only current/future dates.

• Others → only past/current dates. (FAQ 10)

Q6. What if I have multiple GSTINs under one PAN?
Opting out for one GSTIN opts out for all. (FAQ 9)

✅ 6. Compliance Checklist (Fillable Format)