Switch over to Composition Scheme

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If you're considering switching from a regular taxpayer scheme to the GST Composition Scheme, you'll need to follow specific steps. This includes filing Form GST CMP-02 by March 31st, 2025, and reversing any ITC related to stock using the prescribed formula, declaring this reversal via Form GST ITC-03 by the same date. It's also crucial to assess if GST registration is still necessary if all your outward supplies are exempt, as Section 23(1)(a) might allow for cancellation instead.

komal ameta

komal ameta (Querist)

17 February 2025 Dear Experts,

If we switch to composition sceme from a regular tax payer scheme, what will be the steps we need to follow in case we have exempted outward supplies. We have reversed all our ITC till date.

Kindly reply for the steps we need to take and and the things we need to specifically take care in the procedure.

Thank you in advance, it is a great platform for seeking valuable advice.

ASHWANI DHANUKA

ASHWANI DHANUKA (Expert)

18 February 2025 File GST CMP 02 by 31.03.2025
Reverse ITC contained in Stock as per the formula prescribed in act . By 31.03.2025
File Form GST ITC 03 for declaring IT Reversed. By 30.05.2025

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Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

28 October 2026 If all your outward supplies are exempt, check first whether you need GST registration at all — Sec 23(1)(a) excludes persons making only exempt supplies, so cancellation through REG-16 may be simpler than moving to composition; CMP-02 can only be filed before the start of a financial year.

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