All about Composition Dealers including applicable returns

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 07^th 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:

Applicable Returns and due date of the same:

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.