About the Composition Scheme:

♦ Whose turnover is below 1.5 Crore in other states or 75 lakhs in North-Eastern states and Himachal Pradesh (Notification No. 14/2019 – Central Tax dated 07th March, 2019). Such person can provide services up to 10% of turnover or Rs. 5 lakh whichever is higher.

♦ For Service provider the turnover limit is Rs. 50 lakhs, who is purely engaged in providing services.

♦ Following persons cannot opt for composition scheme:

  • Manufacturer of ice cream, pan masala or tobacco and Aerated Water;
  • A person making inter-state supplies;
  • A casual taxable person or a non-resident taxable person and;
  • Businesses which supply goods through an e-commerce operator.

♦ To opt for scheme taxpayer is required to file GST CMP-02 to the Government intimating to opt for the scheme at the beginning of the FY.

♦ Turnover for Trader means turnover of taxable supply of goods only.

Conditions to be complied by Composite Dealers:

  • The dealer is not eligible to claim Input Tax Credit
  • The dealer cannot supply GST exempted goods
  • The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism
  • If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
  • The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
  • The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.

Tax Rate applicable to Composite Dealers:

Sr. No. Type of Dealer Applicable tax Rate
1 Manufacturer or Trader 0.5% CGST + 0.5% SGST = 1%

(Notification No. 1/2018-Central Tax dated 01st January, 2018)

2 Person providing restaurant service 2.5% CGST + 2.5% SGST = 5%
3 Service Provider 3% CGST + 3% SGST = 6%

Applicable Returns and due date of the same:

Sr. No. Financial Year Returns and Challans Forms Due Date
1 2017-18 GSTR 4 – Quarterly return giving details of outward supplies and tax payable thereon

GSTR 9A – Annual Return

GSTR 4 – 18th of next month after the end of the relevant quarter

GSTR 9A – 31st Jan-2019

2 2018-19 GSTR 4 – Quarterly return giving details of outward supplies and tax payable thereon

GSTR 9A – Annual Return

GSTR 4 – 18th of next month after the end of the relevant quarter

GSTR 9A – 30th Sep-2020

3 2019-20

Onwards

CMP-08 – Quarterly payment of tax

GSTR 4 – Annual Return

[Notification No. 02/2019– Central Tax (Rate), dated the 7th March, 2019]

CMP-08 – 18th of next month after the end of the relevant quarter

GSTR 4 – 30th April of next FY

Extension in view of Current Pandemic:

  • The dealers can submit challan-cum-statement in form CMP-08 for the January-March 2020 quarter by 7th July 2020.
  • The time limit to file GSTR-4 annual returns for the FY 2019-20 by the composition dealers has been extended till 15th July 2020.

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