GST Under Composition Scheme

Goods and Services Tax

GST Registration Under Composition Scheme process and documentation

Composition scheme is a convenient way for the small taxpayers in order to escape from too many GST formalities and pay the tax at a fixed rate based on their business turnover.

Getting registered under composition scheme is optional and voluntary. Any business which has a turnover less than Rs.75 Lakhs (Rs. 50 Lakhs for North- Eastern States) can opt for this scheme but on any given day, if turnover crosses the above-mentioned limit, then he becomes ineligible and has to take registration under the regular scheme.

There are certain conditions that need to be fulfilled before opting for composition levy. Any assessee who only deals in supply of goods can opt for this scheme that means this provision is not applicable for service providers. However, restaurant service providers are excluded.

Any dealer who is supplying goods through electronic commerce operator will be barred from being registered under composition scheme. For example: If M/s ABC sells its products through Flip kart or Amazon (Electronic Commerce Operator), then M/s. ABC cannot opt for composition scheme.

When the eligible taxpayer is opting for the Composition Scheme under GST, a taxpayer has to file a summarized returns on a quarterly basis, instead of three monthly returns (as is applicable for normal businesses).

Who can avail composition scheme

Only those persons who fulfill all the following are eligible to apply for composition scheme:

  • Deals only in the intra-state supply of goods (or service of only restaurant sector).
  • Proof Of Does not supply goods not leviable to tax.
  • Identity & Have an annual turnover below Rs. 75 Lakhs (Rs. 50 Lakhs for north-eastern states) in preceding financial year.
  • He shall pay tax at normal rates in case he is liable under reverse charge mechanism.
  • Not supplying through e-commerce operator.
  • Not a manufacturer of – ice cream, pan masala or tobacco (and its substitutes)

How we can help with GST Under Composition Scheme

  • We'll offer and advice on all aspects related to GST Registration
  • We'll will ensure that all aspects of your business are compliant with GST
  • We'll file your returns and complete all other compliances and when required

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Tax Composition

Only those persons who fulfill all the following are eligible to apply for composition scheme:

  • Traders will have to pay 1% tax
  • Manufacturers will have to pay 2% Tax
  • Identity & Restaurant Businesses will have to pay 5% tax