Rule 3 and Rule 4: Which CMP Form, and When the Option Actually Starts

Rule 3 and Rule explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Getting into the composition scheme is a five-sub-rule procedure with four different entry routes, three forms and two statements. Rule 4 then decides the date the option bites — which is not always the date you filed.

Rule 3 provides the routes in: CMP-01 for provisionally registered persons at the appointed day, Part B of FORM GST REG-01 for a new registration, CMP-02 before the start of a financial year, and CMP-03 for the stock declaration where CMP-01 was used. Opting in from the regular scheme also requires FORM GST ITC-03 within sixty days of the start of the year. Rule 3(5) deems an intimation for one place of business to cover every registration on the PAN, and Rule 4 fixes the effective date by route.

The four routes in

Rule 3(1) — CMP-01, the transitional route. A person granted registration on a provisional basis under Rule 24(1)(b) who opts to pay under s.10 files FORM GST CMP-01 electronically, signed or verified through EVC, prior to the appointed day but not later than thirty days after it, or such further period as the Commissioner extends. Its proviso: where CMP-01 is filed after the appointed day, the person shall not collect any tax from the appointed day and shall issue a bill of supply for supplies made after that day.

Rule 3(2) — REG-01 Part B, the new-registration route. A person applying for registration under Rule 8(1) may give the option in Part B of FORM GST REG-01, and that "shall be considered as an intimation to pay tax under the said section". No separate CMP form.

Rule 3(3) — CMP-02, the annual route. A registered person who opts to pay under s.10 files FORM GST CMP-02 electronically, signed or verified through EVC, prior to the commencement of the financial year for which the option is exercised, and shall furnish FORM GST ITC-03 under Rule 44(4) within sixty days from the commencement of the relevant financial year.

Rule 3(3A) — the mid-year route, now spent. It allowed a person to opt with effect from the first day of the month after filing CMP-02, on or before 31 March 2018, with ITC-03 within one hundred and eighty days — substituted from ninety by Notification No. 03/2018-CT. It is historical, but it is the only place in Chapter II where the option ever took effect mid-year.

CMP-03: the stock declaration, and only for one route

Rule 3(4) applies to a person who filed an intimation under sub-rule (1) — the CMP-01 route. That person furnishes, in FORM GST CMP-03, the details of stock, including inward supply of goods received from unregistered persons, held on the day preceding the date from which the option takes effect, within ninety days of exercising the option, or such further period as the Commissioner allows.

Ninety days is itself substituted — Notification No. 22/2017-CT dated 17.08.2017 raised it from sixty.

Do not confuse CMP-03 with ITC-03. CMP-03 is a stock declaration attached to the transitional CMP-01 route. ITC-03 is a credit reversal under Rule 44(4), and it attaches to the CMP-02 route. ITC-03 in, ITC-01 out →

Rule 3(5): one intimation covers the PAN

"Any intimation under sub-rule (1) or sub-rule (3) or sub-rule (3A) in respect of any place of business in any State or Union territory shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number."

This is the operational half of the PAN-wide election. The proviso to s.10(2) says every registration must opt; Rule 3(5) makes one filing do the work of all.

Note what the sub-rule does not list — sub-rule (2). The REG-01 Part B route is not named, which is consistent: a fresh registration application is specific to one State, and the deeming provision is directed at intimations by persons already registered. Section 10(2) conditions →

Rule 4: the effective date

Rule 4(1) — where the intimation is filed under Rule 3(3) (CMP-02), the option is effective from the beginning of the financial year; where filed under Rule 3(1) (CMP-01), from the appointed day.

Rule 4(2) — the intimation under Rule 3(2) (REG-01 Part B) "shall be considered only after the grant of registration to the applicant", and the option is effective from the date fixed under sub-rule (2) or (3) of Rule 10.

Rule 10(2) and (3) are the registration effective-date rules. Where the application is made within thirty days of becoming liable, registration is effective from the date the person became liable to register. Where it is made after thirty days, registration is effective from the date of grant of registration.

So a late applicant gets composition later than they may expect. The composition option follows the registration date, and a delayed application pushes both forward — leaving a gap during which supplies were made by a person liable to be registered but not yet in the scheme. Rule 10 registration certificate →

Three practical points that Rule 3 settles

No annual renewal. Rule 5(2): "The registered person paying tax under section 10 may not file a fresh intimation every year and he may continue to pay tax under the said section subject to the provisions of the Act and these rules." CMP-02 is filed once, before the year in which the option starts, and carries forward until the person exits.

The window is before the year starts, not during it. Rule 3(3) says "prior to the commencement of the financial year". There is no general mid-year entry route into composition — the only one that ever existed was Rule 3(3A), and it closed on 31 March 2018. A person who misses the window waits a full year.

ITC-03 is sixty days, not ninety. The CMP-02 route's statement is due within sixty days from the commencement of the relevant financial year — so for an option taking effect on 1 April, ITC-03 is due by 30 May. The ninety-day figure belongs to CMP-03 on the CMP-01 route.

Key takeaways

• CMP-01 (transitional), REG-01 Part B (new registration), CMP-02 (before the year) and CMP-03 (stock, CMP-01 route only) are the Rule 3 forms.
• ITC-03 within sixty days of the start of the year attaches to the CMP-02 route under Rule 3(3) read with Rule 44(4).
• Rule 3(5) deems one intimation to cover every registration on the same PAN.
• Rule 4 makes the CMP-02 option effective from the beginning of the year, and the REG-01 option effective from the Rule 10(2) or (3) registration date.
• Rule 5(2) removes any need for annual renewal.
• There is no live mid-year entry route; Rule 3(3A) closed on 31 March 2018.

Read next

• Rule 5: Seven Conditions and Restrictions
• Entering and Exiting: ITC-03 In, ITC-01 Out
• Rule 6: Lapse, Withdrawal and the CMP-04 to CMP-07 Chain
• Section 10(2)(a) to (f): The Six Gates

Disclaimer: Positions stated as on 5 September 2026, based on Rules 3, 4, 5 and 44 of the CGST Rules, 2017 with their amendment footnotes as recorded in the ICAI Bare Law (12th edition, amended to 31 March 2026), and the ICAI Handbook on Composition Scheme under GST (February 2026, 3rd edition).