A registered taxpayer under the Composition Scheme in GST can withdraw from the scheme voluntarily or mandatorily.
The following are the details regarding withdrawal from the Composition Scheme:
- Voluntary withdrawal: A composition dealer can choose to withdraw from the Composition Scheme voluntarily by filing an application in Form GST CMP-04. The dealer must file this application before the start of the financial year in which they want to withdraw.
Once the application for voluntary withdrawal is approved, the dealer must file a return in Form GSTR-4 for the period in which they were registered under the Composition Scheme.
- Mandatory withdrawal: A composition dealer is required to withdraw from the Composition Scheme if their annual turnover in the current financial year exceeds the threshold limit of Rs. 1.5 crore or Rs. 75 lakh in case of businesses in the North-Eastern states and Himachal Pradesh.
The dealer must file an intimation in Form GST CMP-04 within 7 days from the date on which their turnover exceeds the threshold limit. After the intimation is filed, the dealer will be deemed to be a regular taxpayer from the date on which their turnover exceeds the threshold limit.
It is important for dealers registered under the Composition Scheme to keep track of their turnover and comply with the withdrawal provisions to avoid any penalties or fines.
