Composition Scheme is a simple and easy scheme under GST for taxpayers. In which small taxpayer pay tax a concessional rate instead on normal tax rate and they are also not eligible to take input tax credit.
Who is eligible to opt GST composition Scheme
Following Person is eligible for composition Scheme and Concession Tax Scheme
| Basis | Composition Scheme U/s 10(1) & 10(2) | Concessional Levy Scheme U/s 10(2A) |
|---|---|---|
| 1 Optional Scheme | It is an Optional Scheme | It is an Optional Scheme |
| 2. Eligible Person | >Manufactures [Other than notified Goods] -Ice cream, Edible ece, whether or not cantaining Cocoa. -Pan Masala, -Tobacco, -Aerated Water, -Fly asd bricks/blocks, building bricks. >Trader, >Restaurant Services Provider ( Who is making supplies under Schedule-I.) | Exclusively Engaged in Supplying of services other than restaurant services. Any Person who is not eligible to composition scheme.(Except Manufacturer of Notified Goods). |
| 3. Aggregate Turnover for Eligibility | Registered person whose aggregate turnover is not exceeding 1.5 crore or 75 lakhs in special category states such as Sikkim, Tripura, Nagaland, Arunachal Pradesh, Mizoram, Meghalaya, Manipur, Uttarakhand. | Aggregate Turnover in Preceding financial year is not exceeding 50 lakhs. |
| 4. Tax Rates | Manufacturer :- (CGST=0.5% of ATO), (SGST=0.5% of ATO) Trader :- (CGST=0.5% of Taxable Supply), (SGST= 0.5% of Taxable Supply), Restaurant Service Provider :- (CGST=2.5% of ATO), (SGST=2.5% of ATO) | CGST=3% of ATO, SGST=3% of ATO |
| 5. A Composition Scheme Holder can Provide Services Other than Restaurant Services | Composition taxpayer is permitted to provide services other than restaurant services up to specified limit. This specified Value is leaset of the following: ->10% of Turnover in a state/Union Territory in the preceding Financial year, ->5,00,000 | – |
| 6. Aggregate Turnover Note:- | All outward supplies i.e., ->Taxable Supplies ->Exempted Supplies ->Exported ->Inter-state supplies of a person having same PAN to be computed on all India basis. Exclusion – CGST, SGST, IGST, Cess, Value of inward supplies on tax paid under RCM. Note; Interest income on loan advances and deposit to be excluded while calculating aggregate turnover. |
Who cannot opt to composition scheme u/s 10 /10(2A)
- Supplier making any supply of goods and services which is not leviable to tax,
- Supplier making inter-state supply of goods and services
- Person supplies any goods and services through an E- commerce operator who is required to collect tax u/s 52.”online seller of goods and seller“
- Manufacturer of notified goods
- Supplier is casual taxable person or non-resident taxable person
Which return is required to file for composition taxpayer
- CMP-08- this form is statement cum-challan which is required to deposit quarterly basis on 18th of the month after ending the quarter.
- GSTR-4- This return is annual return which is filed on 30th April of next financial year.
Some Important points need to be consider in both scheme
- The option availed by a taxpayer u/s 10 shall lapse with effect from the day on which aggregate turnover during current F.Y. exceed specified limit and has to obtain registration as normal taxable person.
- Composition scheme to be adopted by all the registered person having same PAN.
- The taxpayer registered u/s 10 shall neither collect tax from the recipient and nor take input tax credit on inward supply.
- The taxpayer shall pay tax as per RCM basis if RCM applicable on inward supply.
Applicable form on composition dealer
| Applicable Form | ||
| GST CMP-01 | Prior to appointed date or within 30 days of the said date | |
| GST CMP-02 | Every registered person as regular taxpayer switching into composition scheme | Prior to commencement of Financial year |
| GST CMP-03 | Details of stock and inward supply from registered and unregistered person | Within 90 days from exercising option |
| GST CMP-04 | Intimation for withdrawal from composition scheme(in case of ineligible for such scheme) | within 7 days from he become ineligible for scheme |
| GST REG-01 | For Registeration in composition scheme | prior to the appointed date |
| GST ITC-01 | For taking ITC contained in Input held in Stock, Semi-finished goods and Finished goods and capital goods | Within 30 days of switching from composition levy to regular scheme |
| GST ITC-03 | For Reversal of ITC contained in Input held in Stock, Semi-finished goods and Finished goods and capital goods | within 60 days of commencement of financial year |
