Checklist on Composition Scheme under GST

1. Whether the person with an annual turnover of less than 75 lakhs on the sale of goods or services in the preceding financial year in a single state have opt to pay a tax under composition scheme?

Conditions: Provided that no such permission shall be granted to a taxable person who effects any inter-State supplies of goods and/or services.

Provided further that no such permission shall be granted to a taxable person unless all the registered taxable persons, having the same PAN as held by the said taxable person, also opt to pay tax under the provisions of this sub-section.

2. Check whether the taxable person who has opted for composition scheme has not collected any tax from the recipient on supply made by him?

3. Check whether the person opting for composition scheme has not availed Input Tax Credit?

4 .Check whether the person opting for composition scheme has

i. Not engaged himself in making supply of goods through electronic commerce operator who is required to collect tax at source.

ii. Not engaged in the supply of services other than supplies of Restaurant Service.

iii. Not engaged in making any supply of goods which are not leviable to tax under this Act;

5. Check whether 1% of the turnover in paid in case of manufacturer.

6. Check whether 2.5% of the turnover in paid in case of supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

7. Check whether 0.5% of the turnover in paid in case of retailers?

8. Whether the composition scheme has been lapsed in the financial year with effect from the day when the aggregate turnover has exceeded the prescribed limit of 75 lakhs?

9. Whether the composition dealer is filing the Quarterly return on 18th of the month succeeding quarter in GSTR-4?

10. Check whether composition dealer is not issuing tax invoice and all the BILL OF SUPPLY issued by the dealer contains the words ”composition taxable person, not eligible to collect tax on supplies”?

11. Check whether the composition dealer in current regime is going in regular taxation under GST has taken credit of input held in stock, or in semi-finished goods or in finished goods on the day immediately preceding the date from which they opt to be taxed as a regular tax payer?

12. Check whether the goods held by the dealer on the appointed day has not been purchased in the course of inter state trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State?

13. Check whether the goods held in stock by him have not been purchased from an unregistered person and where purchased, he has paid the tax ?

14. Whether the composition dealer has paid the tax on inward supply of goods and services or both received from unregistered persons?

15. Check whether the composition dealer have mentioned the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business?

16. Whether while switching from normal scheme to composition scheme, the taxpayer has paid an amount equal to the credit of input tax in respect of inputs held in stock on the day immediately preceding the date of such switch-over?

Whether the balance of input tax credit after payment of such amount, if any lying in the credit ledger had been lapsed by the dealer?

17. Whether the person who is granted registration on a provisional basis and who opts for Composition Levy has filed an intimation in FORM GST CMP-01, duly signed, before or within 30 days of appointed date?

18. Whether following details have been filed in FORM GST CMP- 03 within 60 days of exercise of option:

a) Details of stock

b) Inward supply of goods received from unregistered persons held by him on the date preceding the day of exercise of option?

19. Whether annual return is filed by all the registered taxable person by 31st December of next financial year?

What if the above provisions are not complied with?

Penalty

If the proper officer has reasons to believe that a taxable person has paid tax under composition scheme, despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

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