Mobile shop — switching composition to normal

The mobile shop is still open because two customers are comparing covers. You have been a composition dealer for years: bill of supply, no GST line for the customer, quarterly CMP-08. This year’s box sales have jumped. A wholesaler in the city said you are close to the composition turnover cap. You do not want a notice that says you stayed in the scheme after you were ineligible. It is 9:40 pm. You need the difference between CMP-02 and CMP-04, and what happens to stock.

Composition is optional while you are eligible. When you cross the notified aggregate turnover limit, or when you choose to leave, you move to the normal (regular) levy. You then charge GST on tax invoices, file GSTR-1 and GSTR-3B, and you may take ITC if the rules allow. Check this month’s official composition turnover limit for your state. The figure shops quote for goods in most states is 1.5 crore in the preceding financial year, with a lower cap in specified states. Confirm official. Do not treat a WhatsApp number as the law.

CMP-02 is not the form for leaving

CMP-02 is the intimation to opt into composition, usually before a new financial year starts. Existing regular taxpayers who want composition file it on the portal, commonly in a window that has often run into 31 March for the next year. For current dates, open gst.gov.in and the official tutorial. Path people use to opt in:

gst.gov.in → Services → Registration → Application to Opt for Composition Levy

If you are leaving composition, you are not looking for CMP-02.

CMP-04 is the withdrawal intimation

To withdraw from composition, the form is GST CMP-04.

Path (wording on the live menu may be “Application for Withdrawal from Composition Levy”):

gst.gov.in → login → Services → Registration → Application for Withdrawal from Composition Levy

Official tutorials say you file CMP-04 within seven days of the event that makes you ineligible, or before the date you want if you leave voluntarily. Voluntary withdrawal generally cannot be backdated. If you became ineligible because turnover crossed the limit, you do not pick a convenient future date to keep issuing bills of supply. Check the form’s date rules on the portal this month.

Once CMP-04 is filed, the portal typically marks you out of composition without a long approval drama. Still download the acknowledgement. Track if a track option is shown:

gst.gov.in → Services → Registration → Track Application Status

From the effective date of withdrawal, you are a normal taxpayer. Bill of supply for taxable mobile sales stops. Tax invoice starts.

Stock and ITC — high level, not a worksheet

On composition you generally could not take ITC. When you become a regular taxpayer, the law allows a declaration of stock of inputs, inputs in semi-finished or finished goods, and certain capital goods as on the day before you become liable under the regular levy. The form shops name for this is GST ITC-01. Official pages say this statement is to be filed within a period such as thirty days from the relevant date. Confirm the current official time limit when you file.

ITC-01 is not a place to invent stock. Count phones, accessories, and parts that are actually in the shop, with purchase invoices that can support credit. Invoices that are too old may fail the conditions. If the credit claimed is above a notified amount, a CA or CMA certificate can be required. Get local help for the count. GST Atka will not build a fake stock list.

If you cannot claim a particular item, you still switch. Missing ITC is painful. Staying in composition after you are ineligible is worse.

Invoices after the switch

Print a new invoice series if you need a clean break, but uniqueness matters more than superstition. Each tax invoice needs GSTIN, customer GSTIN if registered, HSN, taxable value, GST rate for that item, and tax amount. Mobiles and parts have had rate changes. If you are unsure of a rate, check this month’s official rate schedule. Do not copy last year’s composition mindset of “no tax on the bill”.

Registered buyers will want your tax invoice so they can take ITC. Your GSTR-1 must show those invoices.

Do not issue a tax invoice without GST on a taxable supply. Do not run composition-style bills of supply after the effective date of withdrawal. Do not keep two printers “composition for cash, regular for GST customers”.

Returns after you are normal

Composition had CMP-08 and GSTR-4. Regular has GSTR-1 (or IFF if QRMP applies to you) and GSTR-3B.

gst.gov.in → Services → Returns → Returns Dashboard

The dashboard should start offering 3B and GSTR-1 for periods after the switch. File from the first period you are regular, even if it is a short period. Nil if needed.

Pay tax through official challan into the cash ledger, then offset. Composition tax you already paid for an earlier quarter stays in its own story; do not try to “adjust” it by under-reporting new 3B. Get local help if a period straddles the switch and you are confused.

E-invoice and e-way: composition dealers had limits on e-invoice. As a normal taxpayer, watch the e-invoice turnover threshold if you cross it. E-way still follows value and rules. Check official thresholds this month.

Why a mobile shop hits this wall

Accessories plus phones add up fast. Interstate purchase is normal in this trade; composition has restrictions on interstate outward supply of goods. If you started sending phones to another state, you may already have broken a composition condition even before the turnover cap. Withdraw and regularise. Do not hide interstate outward supplies to stay in the scheme.

If you are still eligible and simply tired of composition, voluntary CMP-04 is allowed, with the date rules on the form. After you leave, opting back in later means CMP-02 in the next window, not a mid-year flip whenever you feel like it. Check official.

FAQ

I am leaving composition. Do I file CMP-02?

No. CMP-02 is for opting into composition. Leaving is CMP-04 on gst.gov.in under Services → Registration → Application for Withdrawal from Composition Levy. Confirm the menu label on your login.

When do I start charging GST on mobile invoices?

From the effective date of withdrawal or ineligibility as per the form and the law. After that date, issue tax invoices with GST at the applicable official rate. Do not keep bills of supply for taxable sales.

Can I take ITC on phones lying in the showcase?

Possibly, through ITC-01 and the stock-and-invoice conditions, at a high level: eligible stock as on the day before you become a regular taxpayer, within the official time limit, with supporting purchase documents. Count honestly. Get local help. Do not invent stock.

What is the composition turnover limit for a mobile shop this year?

Check the official limit this month. Many goods traders in most states still hear 1.5 crore (lower in specified states). Your PAN-level aggregate turnover matters, not only this counter. If you have crossed it, file CMP-04 and do not wait for a notice.

GST Atka is not a GSTN office. File on gst.gov.in. Rules change. Do not evade tax. Personal case: get local help.