GST Composition Scheme Opt-in Letter (CMP-02)
Record your decision to opt into the composition scheme for a financial year and check eligibility before filing Form GST CMP-02.
What it is
An existing registered taxpayer opts into the composition scheme under Section 10 of the CGST Act by filing Form GST CMP-02 on the GST portal before the start of the financial year. The scheme is open to manufacturers and traders with aggregate turnover in the preceding year up to ₹1.5 crore (₹75 lakh in specified special category States), restaurants, and, under Section 10(2A), service providers with turnover up to ₹50 lakh. This letter records the decision, the eligibility check and the turnover.
When it is used
- A small trader or manufacturer choosing to pay tax at a fixed rate.
- Small service providers eligible under Section 10(2A).
- Before the start of a financial year, when the option is exercised.
What the template covers
- Entity name, GSTIN, PAN and address
- Financial year from which the scheme applies
- Type of composition
- Preceding year aggregate turnover
- State category for the limit
- Authorised signatory
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Letter
Letter Date; Effective from Financial Year
Entity
Entity Name; GSTIN; Address; PAN
Composition
Type of Composition
Eligibility
Preceding FY Aggregate Turnover (₹); State Category
Signatory
Authorised Signatory; Designation
Stamp duty, registration and filing
The option applies to all registrations under the same PAN. Within 60 days of opting in from the beginning of the year, the taxpayer files Form GST ITC-03 to pay back credit on stock held. Certain businesses, such as manufacturers of notified goods, inter-State suppliers of goods and e-commerce sellers through operators that collect tax, are not eligible. Check the current eligibility and the special category States on cbic-gst.gov.in.
Generate the GST Composition Scheme Opt-in Letter (CMP-02)
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. GST registration or returns)? Contact SKAG and Associates
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Frequently asked questions
When should CMP-02 be filed?
Before the start of the financial year for which you want the scheme, on the GST portal.
Can a new registrant opt for composition?
Yes, by choosing the option in the registration application itself.
Can I leave the composition scheme mid-year?
Yes, by filing Form GST CMP-04, or you are moved out automatically if you cross the turnover limit.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.