Q
1. What is meant by Compulsory Withdrawal from Composition Levy?
Ans.
A taxpayer can opt out of Composition levy in any of the two ways:
Voluntarily opt out of Composition levy by filing Form GST CMP-04 on the GST Portal or
Compulsorily removed out of Composition levy by the Tax Official at
any time during the financial year.
In
case, the taxpayer does not opt out of the Composition levy within 7 days of
disqualifying event, proceedings for compulsory withdrawal from Composition
levy can be initiated by the Tax Official.
Q 2. What are the pre-conditions for Compulsory Withdrawal from
Composition Levy?
Ans. Listed below are the pre-conditions for Compulsory Withdrawal
from Composition Levy:
1.
Taxpayer has a valid and active GSTIN.
2.
Composition Taxpayer has
successfully submitted “Application to opt for Composition levy” for the
subsequent financial year or Applicant is flagged as Composition taxpayer as on
the current date.
Q 3. By when can a taxpayer reply to SCN
issued by Tax Official?
Ans. On issue of SCN to taxpayer for Compulsory withdrawal from the Composition
levy, taxpayer needs to file a reply within 15 days from date of issue of such notice.
Q
4. How can I view the notice and order issued for Compulsory Withdrawal from
Composition Levy?
Ans.
Navigate to Services > User Services > View Notices and Orders option to
view the notice and order issued by Tax Official for Compulsory Withdrawal from
Composition Levy.
Q 5. How can I reply to the notice issued by Tax Official
for Compulsory Withdrawal
from Composition Levy?
Ans.
Navigate to Services > Registration > Application for Filing
Clarifications option to reply to the notice issued by Tax Official for
Compulsory Withdrawal from Composition Levy.
Q
6. Can a Tax Official Compulsory Withdraw a taxpayer from Composition Levy
without issuing SCN?
Ans. Compulsory withdrawal from Composition levy cannot be initiated
without issuing SCN by the Tax Official. Taxpayer will always be given an opportunity
of being heard before withdrawal from the Composition levy.
Q 7. What a Tax Official
can do in case taxpayer
has not replied to SCN issued by Tax Official?
Ans. The Tax Official will have 30 calendar days’ time from the date of
receipt of clarification from taxpayer on SCN or 15 days if no reply is
received from taxpayer on SCN issued, whichever is earlier, to withdraw
Composition levy of the taxpayer.
Q 8. Tax Official has initiated Compulsory Withdrawal from
Composition Levy. What will happen in case, I have applied for new registration
with same PAN?
Ans.
If any new registration application is filed mapped to the same PAN and is
pending for processing with the Tax officer, which is not approved or rejected,
the decision of the approval/ rejection of proceeding for Compulsory withdrawal
from Composition levy will also apply to the new GSTIN as applicable.
After
issue of “Order for Compulsory Withdrawal from Composition levy”, any new
Registration (GSTIN) granted over the same PAN (having effective date of
Registration earlier than withdrawal date), will be treated as “Composition”
till the date of withdrawal of composition and deemed to be flagged as “Normal”
from the date of withdrawal of composition.
For
example: If the effective date of Registration is 2nd Feb 2020 and withdrawal
from composition date is 11th Feb 2020. In such case, the GSTIN will be treated
as Composition till 11th Feb 2020 and Normal from 12th Feb 2020.
Q
9. What will happen if a Tax Official Compulsory Withdraw a taxpayer from
Composition Levy?
Ans.
Once a Tax Official compulsory withdraws a taxpayer from Composition Levy:
1.
GST Portal will generate an order
for compulsory withdrawal from composition levy.
2.
Taxpayer as well as all GSTINs
mapped to the same PAN will be intimated about compulsory withdrawal via e-
mail and SMS.
3.
GST Portal will remove the ‘Composition’ flag, against all the GSTINs
mapped to the same PAN.
4.
Information about compulsory
withdrawal will be passed on to the concerned State/Centre Tax Authorities of
such GSTINs.
Q 10. What will happen if a Tax Official
drops the proceedings for Compulsory Withdrawal of a taxpayer from Composition
Levy?
Ans. Once a Tax Official drops the
proceedings for Compulsory Withdrawal of a taxpayer from Composition Levy:
1.
GST Portal will generate an order for dropping of proceedings.
2.
Taxpayer will be intimated about
dropping of proceedings via e- mail
and SMS.
3.
Information about dropping the
proceedings will be passed on to the concerned State/Centre Tax Authorities of
such GSTINs.
Q 11. What are the various statuses for
Compulsory Withdrawal of a taxpayer from Composition Levy?
Ans. Various statuses for Compulsory Withdrawal of a taxpayer from
Composition Levy are:
1.
Pending for Clarification: On
issuance of SCN and pending reply by taxpayer
2.
Pending for Order: On receipt of reply to SCN and pending order by
Tax Official
3.
Order Issued: On passing of Order for Withdrawal by
Tax Official
4.
Proceeding Dropped: On passing of
Order by Tax Official for dropping of SCN
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