Composition Scheme

GST Composition Scheme Registration

With changes in indirect taxation every tax payer is required to do compliance’s such as monthly payment of taxes , timely filing of statutory GST returns , maintaining prescribed record as per law. To make the compliance part easier for business persons a Composition scheme under Sec 8 is given, Under which c a taxpayer is eligible to pay taxes to government at certain percentage of his turnover and not allowed to take input tax credit. With a aim of one nation one tax this composition scheme enables less compliance’s to business as compared to earlier laws. Dealer shall electronically file an intimation in FORM GST CMP-01, duly signed, on the Common Portal, either directly or through a Facilitation Center.

Eligibility for GST Composition Scheme Registration

The taxable persons having Aggregate annual turnover of Rs. 50 lakhs are proposed to be made eligible for Composition.

  • Thresholds limit of aggregate Turnover Rs.50 Lac
  • Scheme to be opted for all Units under same PAN
  • Tax would be paid not less than 1%
  • Tax would not be charged and collected from Customer
  • Not entitled to take input tax credit

Key Highlights of GST composition levy

Tax Rate

Rate not more than 1% for manufacturer, 2.5% for restaurant sector and 0.5% for other suppliers of turnover.

Applies to Sales with in Staten

Local suppliers, i.e., those who supply within a state can only take advantage of this scheme. Inter-state suppliers will come under regular GST laws.

Quarterly Return

GSTR-4 has been prescribed by the government as a tax return form to be filed by a dealer under Composition Scheme.

Penalty

Where taxable person is found not eligible for scheme in that case officer may ask for penalty then the tax authorities can impose a penalty equal to differential tax along with penalty.

Turnover Limit

If the turnover of assessee opting composition scheme exceeds Rs.50 Lakhs during the year, he will be shifted to normal Scheme automatically.

GST Rate under Composition Scheme

The category of registered persons, eligible for composition levy under section 10 and these rules, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table.

ParticularsRate

S.No.
1 Manufacturers, other than manufacturers of such goods as may be notified by the Government 1%
2 Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II 2.50%
3 Any other supplier eligible for composition levy under section 10 and these rules 0.5%


Return Filing Under Composition Scheme

Under GST Law Composition scheme introduced to reduce the compliance part for the registered taxable person , under this scheme registered taxable person need to file quarterly GST return within eighteen days after the end of relevant quarter. GSTR-4 has been prescribed by the government as a tax return form to be filed by a dealer under Composition Scheme. In this return registered taxable person need to fill the amount of total turnover of supply during the period along with the details of tax paid. Dealer also need to give information about invoices-level purchases.

More Questions? Seek Help of an Expert

Call us at: 999 956 5491 or Email us: Lalit.agrwal@gmail.com

What We Offer

Personal Consulting on GST

Simplified Excel Template to maintain GST records

GST HSN & SAC Code with Rates

GST Invoicing Formats

GSTN GST Software

Send me all information about Composition Scheme in my mailbox

Let's Start my GST Composition Filing

Monday to Friday
10 AM to 8 PM

#2030/31, Sector-105, RAJENDRA PARK, GURGAON, HARYANA

Call Us:
+91 999 956 5491