Schemes of Composition Levy Under GST

Under the GST regime, a class of registered persons has the option to pay the taxes either under the normal rates or he may opt to pay tax at special lower rates under composition scheme as specified in the CGST Act, 2017 and rules made there under.

Apart from few goods, general rates of taxes under GST are notified between 5% to 28%. However, depending upon the nature of business and subject to fulfillment of eligibility criteria as prescribed under the composition scheme, a registered person may opt to pay tax between 1% to 6% under the composition scheme. As there is a huge gap between the tax rates under normal provisions and those under composition levy, so many restrictions have also been imposed on the registered person to avail the benefit of paying taxes at these special rates.

Initially composition scheme was made available only to traders, a few manufacturers and persons supplying restaurant / catering services etc. However, with effect from 1st April 2019, subject to some restrictions and limitations, a new scheme was made available to registered persons who were otherwise not eligible to pay tax under existing composition scheme. An important point to note here is that, the provision related to composition levy are provided under section 10 of CGST Act 2017, and this new scheme was provided by the way of levying tax at special rates under section 7 of the Act subject to such conditions and restrictions as mentioned in Notification no. 02/2019-CT(R) dtd. 07.03.2019 as amended from time to time. So strictly speaking this new scheme cannot be technically termed as composition scheme, however since most of the provisions under both schemes were common and reference to common rules and section were provided in both the schemes, so for the purpose of this article we are mentioning these schemes are OLD COMPOSITION SCHEME and NEW COMPSOITION SCHEME respectively.

Also later on provisions related to new composition scheme were provided through Finance (No. 2) Act, 2019 dated 01.08.2019 by inserting a new subsection (2A) in section 10 of CGST Act 2017 and related references to this sub-section (2A) were also provided at relevant places in section 10, but these new provisions were made effective only w.e.f. 01.01.2020 through notification no. 01/2020-CT dtd. 01.01.2020. So, now technically speaking both these schemes can now be categorized as COMPOSITION SCHEMES.

To properly implement theses scheme and to bring into effect the provisions of these schemes, various notifications, circulars and orders have been issued as on date. Complete legislative histories of these schemes along with list of forms to be submitted under this scheme are provided at the end of this article.

In this article, we will try to discuss and understand both these schemes under following parameters:

  • Restriction on type of Supplies.
  • Rate of Tax.
  • Turnover Limits.
  • Other Restrictions.
  • Provisions and Procedures related to opting composition scheme.
  • Provisions and Procedures related to withdrawal from composition scheme.

A. Old GST Composition Scheme

Levy under old Composition scheme is provided through section 10 of CGST Act 2017 along with Rule 3 to 7 of CGST Rules 2017.

A.1 Restriction on type of Supplies for GST Composition Scheme.

Initially this composition scheme was meant for supplies rated to goods only, except for one service which was

“services referred to in clause (b) of paragraph 6 of Schedule II”.

In other words apart from goods only composite supply of services,

“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.”

was allowed under this scheme.

Some restrictions are also imposed on manufacturer of some goods. These restrictions are discussed in details in subsequent paragraphs of this article.

However some amendments were made through GST Amendment Act 2018 dtd. 31.08.2018 which was notified vide not. no. 02/2019 dtd. 20.01.2019, whereby w.e.f. 01.02.2019 a person who opts to pay tax under composition scheme may also supply other services, of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.

Let’s understand this with an illustration below:

Turnover in 2017-18 10% of Turnover in 2017-18 Amount of Services Allowed in 2018-19
1,000,000.00 100,000.00 500,000.00
2,000,000.00 200,000.00 500,000.00
3,000,000.00 300,000.00 500,000.00
4,000,000.00 400,000.00 500,000.00
5,000,000.00 500,000.00 500,000.00
6,000,000.00 600,000.00 600,000.00

An important point to note here is that, rendering of services as part of the savings and investment practice of business, by way of extending deposits, loans or advances, in so far as the consideration is represented by way of interest or discount, was resulting in ineligibility of the registered persons for availing the benefits under the aforesaid scheme which was causing hardships to a lot of small businesses to provide a relief to such registered persons, so a RODO No. CGST 01/2019 and UTGST 01/2019 were issued on 01.02.2019 which supersedes earlier RODO No. CGST 01/2017 and UTGST 01/2017, to give effect that the value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account for determining the eligibility for composition scheme under second proviso to sub-section (1) of section 10;

A.2 Rate of Tax under GST Composition Scheme

Section 10 of CGST Act 2017, prescribes only the MAXIMUM Rate of Tax that can be levied under this scheme. As per this section actual rates to be levied under this scheme may be prescribed by the government from time to time.

MAXIMUM Rate of Tax that can be levied under this scheme are as follows:

Sl. No. Category of registered persons Rate of tax
1 In case of a manufacturer One per cent.

of the turnover in State or turnover in Union territory

2 In case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II

i.e.

in case of composite supply of services, 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.

[ SMALL RESTAURANTS, CATERERS ETC.]

Two and a half per cent.

of the turnover in State or turnover in Union territory

3 In case of other suppliers Half per cent.

of the turnover in State or turnover in Union territory

To pay under any tax regime, not only require EXACT rate of tax but also the value of supply on which tax is to be levied. Under this scheme both ACTUAL rate of tax and VALUE of supply on which tax is to be levied is provided in Rule 7 of CGST Rules 2017.

Three rates have been prescribed under this rule, these are:

a. 0.50 % of the TURNOVER in the State or Union territory.

Manufacturers, other than manufacturers of such goods as may be notified by the Government are required to pay tax at rate of half per cent. of the turnover in the State or Union territory.

That means they are required to deposit tax at the rate of:

0.50% CGST + 0.50@ SGST OR 0.50% CGST + 0.50% UTGST As the case may be.

This rate was notified w.e.f. 01.01.2018 vide notification no. 03/2018-CT dtd. 23.01.2018. before this rate of tax under this category was as follows:

ORIGINAL RULES

notified vide N. No. 03/2017-CT dtd. 19.06.2017 w.e.f. 01.07.2017

Notification 03/2018-CT Dtd. 23.01.2018 w.e.f. 01.01.2018
One percent half per cent. of the turnover in the State or Union territory.
As mentioned in Rules Rules Amended

As per clause (e) of sub-section (2) of section 10 of CGST Act 2017 any person who is manufacturer of such goods as may be notified by the Government on the recommendations of the Council, is not eligible to opt for composition scheme. With effect from 1st April 2019 following goods have been notified as per notification no. 14/2019 dated 07.03.2019.

Sl. No. Tariff item, sub- heading, heading or Chapter Description
(1) (2) (3)
1. 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa.
2. 2106 90 20 Pan masala.
2A. 2202 10 10 Aerated Water

Inserted w.e.f. 01.10.2019 vide N. No. 43/2019 dtd. 30.09.2019

3. 24 All goods, i.e. Tobacco and manufactured tobacco substitutes.

Explanation has also been provided along with this table as below:

(i) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapters as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(ii) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

b. 2.50 % of the TURNOVER in the State or Union territory.

Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II i.e. small restaurants, caterers, food joints, canteens etc. are required to pay tax at rate of two and a half per cent. of the turnover in the State or Union territory.

That means they are required to deposit tax at the rate of

2.50% CGST + 2.50@ SGST OR 2.50% CGST + 2.50% UTGST As the case may be.

This rate was notified w.e.f. 01.01.2018 vide notification no. 03/2018-CT dtd. 23.01.2018. before this rate of tax under this category was as follows:

ORIGINAL RULES

notified vide N. No. 03/2017-CT dtd. 19.06.2017 w.e.f. 01.07.2017

Notification 03/2018-CT Dtd. 23.01.2018 w.e.f. 01.01.2018
Two and a half per cent. Two and a half per cent. of the turnover in the State or Union territory.
As mentioned in Rules Rules Amended

c. 0.50 % of the TAXABLE SUPPLIES OF GOODS AND SERVICES in the State or Union territory.

Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter are required to pay tax at rate of half per cent. of the turnover in the State or Union territory.

That means they are required to deposit tax at the rate of

0.50% CGST + 0.50@ SGST OR 0.50% CGST + 0.50% UTGST As the case may be.

This rate was notified w.e.f. 01.02.2019 vide notification no. 03/2019-CT dtd. 29.01.2019 before this rate of tax under this category was as follows:

ORIGINAL RULES notified vide N. No. 03/2017-CT dtd. 19.06.2017 w.e.f. 01.07.2017 N. no. 03/2018-CT Dtd. 23.01.2018 w.e.f. 01.01.2018 N. no. 03/2019-CT Dtd. 29.01.2019 w.e.f. 01.02.2019
half per cent. half per cent. of the turnover of taxable supplies of goods in the State or Union territory half per cent. of the turnover of taxable supplies of goods and services in the State or Union territory
As mentioned in Rules Rules Amended Rules Amended

Some unenforceable notifications on rates under GST composition scheme

As important point to mention here is that the power to prescribe exact rates are vested in Rule 7 of CGST Rules only. However there was a problem in Rule 7 though rates under composition scheme were mentioned in the rule but the taxable value on which tax rates are to be applied were not mentioned there. So, to make this correction, government made another mistake and prescribed the taxable value for rates under composition scheme by issuing notifications WITHOUT actually amending Rule 7. These notifications were N. no. 08/2017-CT and 02/2017-UT both Dtd. 27.06.2017 effective w.e.f. 01.07.2017 where taxable value on which these rates are to be applied were provided. But these notifications were not drafted properly as reference to taxable supplies under Union Territory was left by mistake.

Without realizing the point that through earlier notifications Rule 7 has not been amended, on 1st January 2018 government issued two more notifications to provide reference to taxable values of Union Territory and to reduce the tax rates under composition scheme, these notifications were N. NO. 01/2018-CT and 01/2018-UT. Some other changes were also made through these notifications, but things remained same as again Rule 7 was not amended.

So finally on 23.01.2018 government issued N. No. 03/2018-CT to make necessary changes in Rule 7 of CGST Rules with retrospective effect from 01-01-2018.

To avoid this error in future finally on 29.01.2019 government issued another notification no. 05/2019 whereby drafting error in notification 08/2017-CT was rectified. Now power to decide rates under composition scheme was re-directed to Rule 7 only. So in N.No. 08/2017-CT, for the portion beginning with the words “an amount calculated at the rate of” and ending with the words “half per cent. of the turnover of taxable supplies of goods in State in case of other suppliers”, the words and figures, “an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017 were substituted.

However an important point to note here is that, corresponding notification under union territory tax has still not been issued yet.

All these issues as discussed above are summarized in a tabular format as below:

N. No. 08/2017-CT

N. No. 02/2017-UT

Dtd. 27.06.2017 w.e.f. 01.07.2017

N. No. 01/2018-CT

N. No. 01/2018-UT

Dtd. 01.01.2018 w.e.f. 01.01.2018

N. No. 05/2019-CT Dtd. 29.01.2019
One per cent. of the turnover in State in case of a Manufacturer,

Two and a half per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and Half per cent. of the turnover

In State in case of other suppliers.

HALF per cent of the turnover in the State or Union territory

in case of

Manufacturers,

other than manufacturers of such goods as may be notified by the Government

Two and a half per cent of the turnover in the State

or Union territory

in case of

Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II

Half per cent of the turnover

OF TAXABLE SUPPLIES of GOODS

in the State

or Union territory

in case of

Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter

Drafting error in notification 08/2017-CT was rectified. Now power to decide rates under composition scheme was re-directed to Rule 7 only.

So in the N.No. 08/2017-CT, for the portion beginning with the words “an amount calculated at the rate of” and ending with the words “half per cent. of the turnover of taxable supplies of goods in State in case of other suppliers”, the words and figures, “an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017:

were substituted.

A.3 Limit of aggregate turnover for GST Composition Scheme

When we talk about limit of aggregate turnover, there are basically two limits.

1. Maximum Limit up to which government MAY ALLOW a registered person to pay tax under this scheme.

This Limit is required to be mentioned in CGST Act, 2017.

As of now this limit is Rs. 1 crore 50 Lakhs.

2. Maximum Limit up to which government HAS ALLOWED a registered person to pay tax under this scheme. If aggregate turnover in the preceding financial year of a registered person exceeds this limit, then he is not eligible to opt to pay tax under this scheme.

This Limit was mentioned in CGST Act, 2017

However Act has empowered the government to increase this turnover within permissible limits as mentioned in point 1 above by issuing notifications.

Government has notified separate limits for different Sates / UT.

As of now this limit is as follows:

(i) Arunachal Pradesh 75 Lakhs

(ii) Manipur 75 Lakhs

(iii) Meghalaya 75 Lakhs

(iv) Mizoram 75 Lakhs

(v) Nagaland 75 Lakhs

(vi) Sikkim 75 Lakhs

(vii) Tripura 75 Lakhs

(viii) Uttarakhand 75 Lakhs

(ix) Other States / UT 1 Crore 50 Lakhs

Since this act has been brought into effect, this limit has changed many times.

Changes made in these limits that Govt. MAY ALLOW are produced in a tabular format as below:

Turnover limit that Govt. MAY ALLOW Area Amount (Rs.)
Original as per CGST Act All over India 1 Crore
Notified vide  Not. 02/2019 dtd. 20.01.2019 w.e.f. 01.02.2019 All over India 1 Crore 50 Lakhs

Changes made in these limits that Govt. HAS ALLOWED are produced in a tabular format as below:

Turnover limit that Govt. HAS ALLOWED Original as per CGST Act w.e.f. 01.07.2017 08/2017-CT02/2017-UT, Dtd. 27.06.2017 w.e.f. 01.07.2017 46/2017-CT, 16/2017-UT, Dtd. 13.10.2017 w.e.f. 13.10.2017 N.No. 14/2019 dtd. 07.03.2019 w.e.f. 01.04.2019
Arunachal Pradesh 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Assam 50 Lakhs 50 Lakhs 75 Lakhs 1 Crore 50 Lakhs
Manipur 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Meghalaya 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Mizoram 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Nagaland 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Sikkim 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Tripura 50 Lakhs 50 Lakhs 75 Lakhs 75 Lakhs
Himachal 50 Lakhs 50 Lakhs 75 Lakhs 1 Crore 50 Lakhs
Uttarakhand 50 Lakhs 75 Lakhs 1 Crore 75 Lakhs
Other States / UT 50 Lakhs 75 Lakhs 1 Crore 1 Crore 50 Lakhs

An important point to note here is that, rendering of services as part of the savings and investment practice of business, by way of extending deposits, loans or advances, in so far as the consideration is represented by way of interest or discount, was resulting in ineligibility of the registered persons for availing the benefits under the aforesaid scheme which was causing hardships to a lot of small businesses to provide a relief to such registered persons, so a RODO No. CGST 01/2019 and UTGST 01/2019 were issued on 01.02.2019 which supersedes Supersede earlier RODO No. CGST 01/2019 and UTGST 01/2019, to give effect that the value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account in computing aggregate turnover in order to determine eligibility for composition scheme.

A.4 Other Restrictions and Conditions for GST Composition Scheme

Registered person opting to pay tax under composition scheme

CAN NOT

  • Cannot provide services other than those specified in para A.1 above
  • Cannot provide services over and above the limits mentioned in para A.1 above.
  • Cannot supply any goods which are not leviable to tax under GST Act;
  • Cannot make any Inter-state supply of goods.
  • Cannot supply any goods through another electronic commerce operator who is required to collect tax at source under section 52.
  • Cannot opt to pay under general provisions for his other units under same PAN.
  • Cannot collect any tax from the recipient on supplies made by him.
  • Cannot take credit of input tax.
  • Cannot register himself as a casual taxable person. (This restriction was earlier not provided in section 10 of CGST Act 2017 rather it was imposed by Rule 5 of CGST Rule 2017. Section 10 was amended through Finance (No. 2) Act 2019 dtd. 01.08.2018 but was made effective w.e.f. 01.01.2020 through Notification no. 02/2020 dtd. 01.01.2020)
  • Cannot register himself as a non-resident taxable person. (This restriction was earlier not provided in section 10 of CGST Act 2017 rather it was imposed by Rule 5 of CGST Rule 2017. Section 10 was amended through Finance (No. 2) Act 2019 dtd. 01.08.2018 but was made effective w.e.f. 01.01.2020 through Notification no. 02/2020 dtd. 01.01.2020)

SHALL

  • Shall pay tax under reverse charge mechanism as provided under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both.
  • Shall issue “Bill of Supply” in place of “Tax Invoice”.
  • Shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him.
  • Shall mention 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.

A.5 Compliances for GST Composition Scheme

As per Rule 62 of CGST Rules 2017, every registered person paying tax under composition scheme shall:

  • Furnish a Quarterly statement, containing the details of payment of self-assessed tax in FORM GST CMP-08, till the 18th day of the month succeeding such quarter; and
  • Furnish a return for every financial year in FORM GSTR-4, till the thirtieth day of April following the end of such financial year

As per Rule 80 of CGST Rules 2017, every registered person paying tax under OLD composition scheme shall file Annual Return in Form GSTR-9A. As per section 44 of CGST Act 2017, such annual return is required to be filed on or before the thirty-first day of December following the end of such financial year.

CMP-08 is introduced with effect from 01.04.2019, before 01.04.2019, return in Form GSTR-04 was required to be furnished on quarterly basis. Statement showing comparison of changes brought in Rule 62 is as below:

Original 20/2019-CT dtd. 23.04.2019
(1) Every registered person

paying tax under section 10

shall,

on the basis of details contained in FORM GSTR-4A, and where required, after adding, correcting or deleting the details, furnish the quarterly return in FORM GSTR-4

electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(1) Every registered person paying tax under section 10

or

paying tax by availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i) vide number G.S.R.189 (E), dated the 7th March, 2019

shall-

furnish a statement, every quarter or, as the case may be, part thereof, containing the details of payment of self-assessed tax in FORM GST CMP- 08, till the 18th day of the month succeeding such quarter;

and

furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4, till the thirtieth day of April following the end of such financial year,”;

electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

Provided that the registered person who opts to pay tax under section 10 with effect from the first day of a month which is not the first month of a quarter shall furnish the return in FORM GSTR-4 for that period of the quarter for which he has paid tax under section 10 and shall furnish the returns as applicable to him for the period of the quarter prior to opting to pay tax under section 10.

This proviso was not there in original rules, it was inserted vide not. no. 45/2017 dtd. 13.10.2017

PROVISO DELETED
(2) Every registered person furnishing the

return under sub-rule (1) shall discharge his liability towards tax, interest, penalty, fees or any other amount

payable under the Act or the provisions of this Chapter by debiting the electronic cash ledger.

(2) Every registered person furnishing the

statement under sub-rule (1) shall discharge his liability towards tax or interest

payable under the Act or the provisions of this Chapter by debiting the electronic cash ledger.

(3) The return furnished under sub-rule (1) shall include the –

(a) invoice wise inter-State and intra-State inward supplies received from registered and un-registered persons; and

(b) consolidated details of outward supplies made.

(3) The return furnished under sub-rule (1) shall include the –

(a) invoice wise inter-State and intra-State inward supplies received from registered and un-registered persons; and

(b) consolidated details of outward supplies made.

(4) A registered person who has opted to pay tax under section 10

from the beginning of a financial year shall, where required, furnish the details of outward and inward supplies and return under rules 59, 60 and 61 relating to the period during which the person was liable to furnish such details and returns till the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier.

Explanation.

For the purposes of this sub-rule, it is hereby declared that the person shall not be eligible to avail of input tax credit on receipt of invoices or debit notes from the supplier for the period prior to his opting for the composition scheme.

(4) A registered person who has opted to pay tax under section 10

or

by availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.189 (E), dated the 7th March, 2019

from the beginning of a financial year shall, where required, furnish the details of outward and inward supplies and return under rules 59, 60 and 61 relating to the period during which the person was liable to furnish such details and returns till the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier.

Explanation.

For the purposes of this sub-rule, it is hereby declared that the person shall not be eligible to avail of input tax credit on receipt of invoices or debit notes from the supplier for the period prior to his opting for the composition scheme

or

opting for paying tax by availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i) vide number G.S.R.189 (E), dated the 7th March, 2019.

(5) A registered person opting to withdraw from the composition scheme at his own motion or where option is withdrawn at the instance of the proper officer shall, where required, furnish the details relating to the period prior to his opting for payment of tax under section 9 in FORM GSTR- 4 till the due date of furnishing the return for the quarter ending September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier. (5) A registered person opting to withdraw from the composition scheme at his own motion or where option is withdrawn at the instance of the proper officer shall, where required, furnish a statement in FORM GST CMP-08 for the period for which he has paid tax under the composition scheme till the 18th day of the month succeeding the quarter in which the date of withdrawal falls and furnish a return in FORM GSTR-4 for the said period till the thirtieth day of April following the end of the financial year during which such withdrawal falls.
(6) A registered person who ceases to avail the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.189 (E) , dated the 7th March, 2019, shall, where required, furnish a statement in FORM GST CMP-08 for the period for which he has paid tax by availing the benefit under the said notification till the 18th day of the month succeeding the quarter in which the date of cessation takes place and furnish a return in FORM GSTR – 4 for the said period till the thirtieth day of April following the end of the financial year during which such cessation happens.

On 23.04.2019 another notification N. No. 21/2019-CT was issued, whereby it was mentioned that a person opting for composition scheme:

  • Shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, till the 18th day of the month succeeding such
  • shall furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4 of the Central Goods and Services Tax Rules, 2017, on or before the 30th day of April following the end of such financial

The registered persons paying tax under composition scheme, in respect of the period for which he has already availed the said benefit, shall be deemed to have complied with the provisions of section 37 and section 39 of the said Act if they have furnished FORM GST CMP-08 and FORM GSTR-4 as provided above.

A.6 Provision and Procedures related to opting Composition Scheme.

A registered person may opt for composition levy in 3 ways:

1. At the time of migration from Pre-GST regime into GST regime.

2. At the time of Fresh GST registration. (Mandatory / Voluntary Registration).

3. At any time after GST registration.

However once composition scheme is opted, he may not file a fresh intimation every year and may continue to pay tax under the said section subject to the provisions of the Act and these rules.

A.6.1 Opting for composition scheme at the time of migration from Pre-GST regime into GST regime.

Either

File intimation in FORM GST CMP-01, prior to the appointed day

or

File intimation in FORM GST CMP-01, not later than thirty days after the said day. However, in such case he shall not collect any tax from the appointed day but shall issue bill of supply for supplies made after the said day.

Furnish FORM GST CMP-03 within a period of Ninety days from the date on which the option for composition levy is exercised.

As per clause (b) of sub-rule 1 of Rule 5 of CGST Rules 2017, the goods held in stock by him on the appointed day should not have 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.

Form CMP-03 contains the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the composition scheme. Time period of ninety days was increased from sixty days to ninety days vide N. No. 22/2017 dtd. 17.08.2017

A.6.2 Opting for composition scheme at the time of registration.

Exercise option to pay tax under Composition scheme in Part B of FORM GST REG-01.

A.6.3 Opting for composition scheme after obtaining registration under GST-regime.

  • Prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised à File an intimation in FORM GST CMP-02.
  • Within a period of sixty days from the commencement of the relevant financial year à Furnish the statement in FORM GST ITC-03.

As per clause (c) of sub-rule 1 of Rule 5 of CGST Rules 2017, the goods held in stock by him should not have been purchased from an unregistered supplier and where purchased, he pays the tax under sub-section (4) of section 9;

Why should he furnish the statement in FORM GST ITC-03?

As per section 18(4), Where any registered person who has availed of ITC opts to pay tax under composition scheme, he shall pay an amount, equivalent to the ITC in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option.

Also after payment of such amount, the balance of ITC, if any, lying in his electronic credit ledger shall lapse.

Manner of reversal of credit under these circumstances is provided in Rule 44 of CGST Rules and per sub-rule (4), such amount shall form part of the output tax liability of the registered person and the details of the amount shall be furnished in FORM GST ITC- 03.

During the financial year 2017-18, option to file FORM CMP-02 was not available during the first few months, so to allow the registered person to opt for composition scheme with effect from 1st October 2017, a new sub-rule (3A) was inserted in rule 3 of CGST Rules 2017 vide notification no. 34/2017-CT.

This Rule was also later on amended twice in the same financial year i.e. F.Y. 2017-18 vide notification no. 45/2017-CT and 03/2018-CT, so as to allow the registered person to opt for composition scheme with effect from the beginning of any month up to 31st March 2018 during the financial year 2017-18.

Consequently due dates of furnishing statement in FORM GST ITC-03 were also extended.

Extracts of Rule 3(3A) of CGST Rules 2017

Inserted vide N.No. 34/2017 dtd. 15.09.2017 From 15.09.2017 to 13.10.2017 Amended vide N.No. 45/2017 dtd. 13.10.2017 From 13.10.2017 to 23.01.2018 Amended vide N.No. 03/2018 dtd. 23.01.2018 From 23.01.2018
Rule 3(3A)

Notwithstanding anything contained in sub-rules (1), (2) and (3),

a person

who has been granted registration on a provisional basis under rule 24

or

who has applied for registration under sub-rule (1) of rule 8

may opt to pay tax under section 10 with effect from the

first day of October, 2017 by electronically filing an intimation in FORM GST CMP-02,

on the common portal either directly or through a Facilitation Centre notified by the Commissioner,

before the said date

AND

shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub – rule (4) of rule 44 within a period of

ninety days from the said date:

Provided that the said persons shall not be allowed to furnish the declaration in FORM GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.

Rule 3(3A)

Notwithstanding anything contained in sub-rules (1), (2) and (3),

a person

who has been granted registration on a provisional basis under rule 24

or

who has been granted certificate of registration under sub-rule (1) of rule 10

may opt to pay tax under section 10 with effect from the

first day of the month immediately succeeding the month in which he files an intimation in FORM GST CMP-02,

on the common portal either directly or through a Facilitation Centre notified by the Commissioner,

on or before the 31st day of March, 2018,

AND

shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (4) of rule 44 within a period of

ninety days from the day on which such person commences to pay tax under section 10:

Provided that the said persons shall not be allowed to furnish the declaration in FORM GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.

Rule 3(3A)

Notwithstanding anything contained in sub-rules (1), (2) and (3),

a person

who has been granted registration on a provisional basis under rule 24

or

who has been granted certificate of registration under sub-rule (1) of rule 10

may opt to pay tax under section 10 with effect from the

first day of the month immediately succeeding the month in which he files an intimation in FORM GST CMP-02,

on the common portal either directly or through a Facilitation Centre notified by the Commissioner,

on or before the 31st day of March, 2018,

AND

shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (4) of rule 44 within a period of

one hundred and eighty days from the day on which such person commences to pay tax under section 10:

Provided that the said persons shall not be allowed to furnish the declaration in FORM GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.

A.7 Provision and Procedures related to withdrawal from GST Composition Scheme.

Withdrawal from Composition Scheme may be due to following reasons:

1. Voluntary withdrawal by a registered person.

2. Withdrawal due to the reason that aggregate turnover during a financial year exceeds the prescribed limits.

3. Withdrawal of scheme by Proper Officer.

As per sub rule (7) to rule 6 of CGST Rules 2017, any withdrawal of the option to pay tax under composition scheme in respect of any place of business in any State or Union territory, shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number.

A.7.1 Voluntary withdrawal by a registered person.

  • File an application in FORM GST CMP-04 before the date of such withdrawal
  • Furnish a statement in FORM GST ITC-01 → within a period of thirty days from the date from which the option is withdrawn is exercised.

ITC-01 contains details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which the option is withdrawn.

Why should he furnish the statement in FORM GST ITC-01?

As per section 18(1)(c), where any registered person ceases to pay tax under composition scheme, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9:

Manner of claiming credit under these circumstances is provided in Rule 40 of CGST Rules and per sub-rule (1), also in case the aggregate value of the such claim exceeds two lakh rupees, details furnished in FORM GST ITC- 03 shall be duly certified by a practicing chartered accountant or a cost accountant .

A.7.2 Withdrawal due to the reason that aggregate turnover during a financial year exceeds the prescribed limits.

Registered person shall:

  • Issue tax invoice for every taxable supply made thereafter.
  • File an intimation in FORM GST CMP-04 within seven days of the occurrence of such event.
  • Furnish a statement in FORM GST ITC-01 within a period of thirty days from the date from which Form CMP-04 is filed.

As per circular no. 77/51/2018 issued on 31.12.2018 it was clarified that in such cases effective date of withdrawal from composition scheme shall be the date as indicated by him in his intimation/application filed in FORM GST CMP-04, but such date may not be prior to the commencement of the financial year in which such intimation /application for withdrawal is being filed.

A.7.3 Withdrawal of scheme by Proper Officer.

Where the proper officer has reasons to believe that the registered person

  • was not eligible to pay tax under composition scheme

or

  • has contravened the provisions of the Act or provisions of this Chapter,

He may issue a notice to such person in FORM GST CMP-05 to show cause as to why the option to pay tax under section 10 shall not be denied.

Within fifteen days of the receipt of such notice, registered person shall file reply in FORM GST CMP-06.

Within a period of thirty days of the receipt of such reply, the proper officer shall issue an order in FORM GST CMP-07. either accepting the reply, or denying the option to pay tax under Composition scheme.

In case such denial is due to reason that the registered person was not eligible to pay tax under composition scheme, such denial shall be effective from the date of the option. However, in case such denial is due to reason that the registered person has contravened the provisions of the Act or provisions of this Chapter, such denial shall be effective from the date of the event concerning such contravention.

  • Such person shall issue tax invoice for every taxable supply made thereafter
  • Furnish a statement in FORM GST ITC-01 within a period of thirty days from the date of the order passed in FORM GST CMP-07.

As per section 10 (5) of CGST Act 2017, 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.

As per circular no. 77/51/2018 issued on 31.12.2018 it was clarified that in such cases effective date of withdrawal from composition scheme Shall be from a date, including any retrospective date as may be determined by tax authorities, but shall not be prior to the date of such contravention. So, following things will happen in such cases:

  • The proceedings as required u/s 10(5) would have to be initiated under the provisions of section 73 or section 74 of the CGST Act for determination of tax, interest and penalty for the period starting from the date of contravention of provisions till the date of issue of order in FORM GST CMP-07.
  • The registered person shall be liable to pay tax under section 9 of the CGST Act from the date of issue of the order in FORM GST CMP-07.
  • Provisions of section 18(1)(c) of the CGST Act shall apply for claiming credit on inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the date immediately preceding the date of issue of the order in FORM GST CMP-07.

B.  NEW GST COMPOSTION SCHEME w.e.f. 01st April 2019

Initially composition scheme was made available only to traders, a few manufacturers and persons supplying restaurant / catering services etc. However, with effect from 1st April 2019, subject to some restrictions and limitations, a new scheme was made available to registered persons who were otherwise not eligible to pay tax under existing composition scheme. Though this scheme is not provided within the purview of provisions of “Composition Levy” under section 10 of CGST Act 2017, however almost all the Rules as applicable to composition scheme under section 10 are made applicable to this scheme. So, in stricter sense we may not call it as a composition scheme but broadly it is another composition scheme under GST.

In case this scheme is opted by a registered person for his one GSTIN, then this scheme shall be applicable on all the GSTIN issued under the same Permanent Account Number.

B.1 Restriction on type of Supplies under new GST Composition Scheme

This scheme is applicable for suppliers of goods or services or both.

However, a registered person who is engaged in making supplies of the goods, the description of which is specified in column (3) of the Annexure below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said annexure, is NOT eligible for this composition scheme.

ANNEXURE

Sl. No. Tariff item, sub-heading, heading or Chapter Description
(1) (2) (3)
1 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa.
2 2106 90 20 Pan masala
2A* 2202 10 10 Aerated Water
3 24 All goods, i.e. Tobacco and manufactured tobacco substitutes

*entry no. 2A inserted w.e.f. 01.10.2019 vide notification no. 18/2019 – Central Tax (Rate) dated 30.09.2019.

(i) “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub- heading, heading and chapters specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(ii) the rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

B.2 Rate of Tax under new GST Composition Scheme

A registered person opting to pay tax under this scheme shall pay tax at the rate of 6.00% i.e.

3.00% CGST + 3.00@ SGST OR 3.00% CGST + 3.00% UTGST As the case may be.

An important point to note here is that in case a registered person opting to pay tax under this scheme, he shall be liable to pay tax at the rate of 6.00% on all his outward supplies irrespective of the fact whether normal rate of tax on that supply is below 6.00% or even if it exempt under GST.

However, he is not liable to pay tax on the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act i.e. no tax is required to be paid supplies made during on pre registration period if registration is obtained on/ before the time limits required for mandatory registration.

B.3 Turnover Limits for new GST Composition Scheme

This scheme is applicable for FIRST supplies of goods or services or both up to an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person. So the moment aggregate turnover of fifty lakh rupees is achieved, a person cannot opt for this scheme in any succeeding years also. An important point to note here is that, unlikely old composition scheme, no powers have been provided to government in section 10(2A) to increase this limit.

The expression “first supplies of goods or services or both” shall include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the said Act

However, In computing aggregate turnover in order to determine eligibility of a registered person to pay tax under this scheme, value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account.

B.4 Other Restrictions under new GST Composition Scheme

  • Aggregate turnover in the preceding financial year should be fifty lakh rupees or below;
  • Registered person who is not eligible for old composition scheme can opt to pay tax under this scheme.
  • Registered person who is engaged in making any supply which is not leviable to tax under the said Act is not eligible for this composition scheme.
  • Registered person who is not engaged in making any inter-State outward supply is not eligible for this composition scheme.
  • Registered person who is neither a casual taxable person nor a non-resident taxable person is not eligible for this composition scheme.
  • Registered person who is engaged in making any supply through an electronic commerce operator who is required to collect tax at source under section 52 is not eligible for this composition scheme.
  • The registered person shall not collect any tax from the recipient on supplies made by him
  • The registered person shall not be entitled to any credit of input tax.
  • The registered person shall be liable to pay tax on inward supplies on which he is liable to pay tax under Reverse Charge Mechanism under section 9(3) or section 9(4) of the Act.

B.5 Compliances under new GST Composition Scheme

The registered person shall issue, instead of tax invoice, a bill of supply as referred to in clause (c) of sub-section (3) of section 31 of the said Act with particulars as prescribed in rule 49 of Central Goods and Services Tax Rules.

The registered person shall mention the following words at the top of the bill of supply, namely: – ‘taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’.

As per Rule 62 of CGST Rules 2017, every registered person paying tax under composition scheme shall:

  • Furnish a Quarterly statement, containing the details of payment of self-assessed tax in FORM GST CMP-08, till the 18th day of the month succeeding such quarter; and
  • Furnish a return for every financial year in FORM GSTR-4, till the thirtieth day of April following the end of such financial year

B.6 Provisions and Procedures related to opting New GST composition scheme.

The Central Goods and Services Tax Rules, 2017, as applicable to a person paying tax under section 10 of the said Act shall, mutatis mutandis, apply to a person paying tax under this notification.

This clause was inserted vide not. no. 08/2019-CT w.e.f. 01.04.2019

Where any registered person who has availed of input tax credit opts to pay tax under this Scheme, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods as if the supply made under this notification attracts the provisions of section 18(4) of the said Act and the rules made there-under and after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

This Clause was inserted vide not. no. 08/2019 w.e.f. 01.04.2019.

As per circular No. 97/16/2019-CGST dtd. 05.04.2019

  • A registered person may opt for payment under said scheme by filing intimation in FORM GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 30th April, 2019.
  • Such person shall also furnish a statement in FORM GST ITC- 03 in accordance with the provisions of rule 3(3) of the said rules.
  • Any person who applies for fresh registration and who wants to opt for payment of tax under this scheme may do so by indicating the option at serial no. 5 and 6.1(iii) of FORM GST REG-01 at the time of filing of application for registration.
  • This scheme would be effective from the beginning of the financial year or from the date of registration in cases where new registration has been obtained during the financial year.

B.7 Provisions and Procedures related to withdrawal from New GST composition scheme.

The Central Goods and Services Tax Rules, 2017, as applicable to a person paying tax under section 10 of the said Act shall, mutatis mutandis, apply to a person paying tax under this notification. This clause was inserted vide not. no. 08/2019-CT w.e.f. 01.04.2019

LEGISLATIVE HISTORY

Section 10 amended 2 times:

OLD COMPOSITION SCHEME

Date Notification No. Circular No. Order No. Effective From Purpose
19.06.2017 N. No. 01/2017-CT, N. No. 01/2017-UT, N. No. 01/2017-IT 01.07.2017 Sections implementing Composition Scheme notified.
19.06.2017 N. No. 03/2017-CT 01.07.2017 CGST Rules 2017 implementing Composition Scheme notified.
26.06.2017 C. No. 01/01/2017 26.06.2017 Assigning functions to proper officers for provisions related to composition levy.
27.06.2017 N. No. 07/2017-CT 01.07.2017 Amendment in CGST Rules 2017

Only some changes in Form CMP-04 Form CMP-07

27.06.2017 N. No. 08/2017-CT’ N. No. 02/2017-UT 01.07.2017 Principal Notification prescribing:

  • Rates of Taxes
  • Maximum Turnover eligibility Limits
  • Goods Restricted under composition scheme

BUT RULES WERE NOT AMENDED.

21.07.2017 O. No. GST 01/2017 21.07.2017 Extension of due date to file intimation in Form CMP-01 up to 16th August 2017
17.08.2017 N. No. 22/2017-CT 17.08.2017 Amendment in CGST Rules 2017

In Rule 3(4) the words “sixty days”, substituted by words “ninety days”

15.09.2017 N. No. 34/2017-CT 15.09.2017 Amendment in CGST Rules 2017 Rule 3A (Extension up to 1st October to file CMP-02)
29.09.2017 O. No. GST 04/2017 29.09.2017 Extension of time limit for intimation of details in FORM GST CMP-03 up to 31.10.2017
13.10.2017 N. No. 45/2017-CT 13.10.2017 Amendment in CGST Rules 2017

  • Changes in Forms also
  • Composition Rule 3A (Composition scheme allowed to avail in any month upto 31-03-2018)
  • Return Rules Rule 62 (composition return for part of Quarter allowed)
  • Changes in Form CMP-02 (opting composition after registration)
  • Changes in Form GSTR-4 (Instruction no. 10 added – inward supplies for registered person, other than those attracting RCM need not to be mentioned in GSTR-4 for Qtr. 2 & Qtr.3 of FY 2017-18)
13.10.2017 N. No. 46/2017-CT, N. No. 16/2017-UT 13.10.2017 Amend 08/2017-CT and 02/2017-UT to increase turnover limits to 75 lakhs for special states and 1 crore for others
13.10.2017 RODO O. No.

CGST 01/2017

UTGST 01/2017

13.10.2017 Value of supply of any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account. For the purpose of checking eligibility and For the purpose of computing aggregate turnover.
28.10.2017 O. No. GST 05/2017 28.10.2017 Extension of time limit for intimation of details of stock in FORM GST CMP-03 up to 30-11-2017
01.01.2018 N. No. 01/2018-CT

N. No. 01/2018-UT

01.01.2018 Amend N. No. 08/2017-CT and 02/2017-UT Central Tax seeks to further amend notification No. 8/2017 – Central Tax (2/2017-Union Tax) so as to prescribe effective rate of tax under composition scheme for manufacturers and other suppliers.

Manufacturers, other than manufacturers of such goods as may be notified by the Government → HALF per cent of the turnover in the State or Union territory

Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II → two and a half per cent of the turnover in the State or Union territory

Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter → half per cent of the turnover OF TAXABLE SUPPLIES of GOODS in the State or Union territory

BUT RULES WERE NOT AMENDED.

SO THESE WERE AMENDED VIDE NOTIFICATION 03/2018 dated 23-01-2018 with RETROSPECTIVE effect from 01-01-2018.

23.01.2018 N. No. 03/2018-CT Amendment in CGST Rules 2017
04.09.2018 N. No. 39/2018-CT Amendment in CGST Rules 2017

Annual Return in GSTR-9A inserted

31.12.2018 C. No. 77/51/2018 Clarifications provided Effective date of withdrawal from Composition Scheme both in case of voluntary withdrawal and in case of withdrawal of scheme by proper officer.
04.09.2019 N. No. 42/2018-CT Date Extension in case of registered person who have filed GST-CMP-04 (application for withdrawal from Composition Scheme) between 02-03-2018 to 31-03-2018,

No penalty for filing ITC-01 for a period of 30 days from 04-09-2018 i.e. no penalty till 03-10-2018.

29.01.2019 N. No. 03/2019-CT Amendment in CGST Rules 2017 to allow composition scheme for service providers also. Reference to Rate for service providers mentioned in rule 7.
29.01.2019 N. No. 05/2019-CT Drafting error in notification 08/2017-CT was rectified. Now power to decide rates under composition scheme was re-directed to Rule 7 only.

So in the N.No. 08/2017-CT, for the portion beginning with the words “an amount calculated at the rate of” and ending with the words “half per cent. of the turnover of taxable supplies of goods in State in case of other suppliers”, the words and figures, “an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017 were substituted.

01.02.2019 RODO O. No. CGST 01/2019 UTGST 01/2019 13.10.2017 Supersede RODO O. No. CGST 01/2017 and O. No. UTGST 01/2017 To the effect that the value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account –

(i) for determining the eligibility for composition scheme under second proviso to sub-section (1) of section 10;

(ii) in computing aggregate turnover in order to determine eligibility for composition scheme.

07.03.2019 N. No. 14/2019-CT Supersede N.No. 08/2017-CT

Changes made in turnover limits and restricted items.

23.04.2019 N. No. 20/2019-CT 23.04.2019 Return Rules Amended

To provide for Quarterly payment of tax and annual filing of returns under composition scheme.

New Form GST CMP-08 to pay tax on monthly basis was also Notified

23.04.2019 N. No. 21/2019-CT 23.04.2019 Changes in Return Filing forms and periodicity.

Form GST CMP-08 Quarterly, till the 18th day of the month succeeding such quarter.

Form GSTR-04 Annually, on or before the 30th day of April following the end of such financial year.

(For both new and old Composition Schemes)

30.09.2019 N. No. 43/2019-CT 01.10.2019 Amend N.No. 14/2019-CT

For inclusion of “Aerated Water” into the list of restricted manufacturing goods.

NEW COMPOSITION SCHEME

Date Notification No. Circular No.

Order No.

Effective From Purpose
07.03.2019 N. No. 02/2019-CT(R)

N. No. 02/2019-UT(R)

01.04.2019 New Composition Scheme notified
29.03.2019 N. No. 09/2019-CT(R)

N. No. 09/2019-UT(R)

01.04.2019 Amendment in N. No. 02/2019-CT(R)
05.04.2019 C. No. 97/16/2019 CGST 01.04.2019 Clarifications regarding applicability of CGST Rules 2017

Form CMP-02, Form ITC-03, Form REG-01 etc.

30.09.2019 N. No. 18/2019-CT(R)

N. No. 18/2019-UT(R)

01.10.2019 Amendment in N. No. 02/2019-CT(R)

FORMS

Form No. Purpose
GST CMP-01 Intimation to pay tax under section 10 (composition levy)

(Only for persons registered under the existing law migrating on the appointed day)

GST CMP-02 Intimation to pay tax under section 10 (composition levy)

(For persons registered under the Act)

GST CMP-03 Intimation of details of stock on date of opting for composition levy

(Only for persons registered under the existing law migrating on the appointed day)

GST CMP-04 Intimation/Application for Voluntary Withdrawal from Composition Levy
GST CMP-05 Notice for denial of option to pay tax under section 10
GST CMP-06 Reply to the notice to show cause CMP-05
GST CMP-07 Order for acceptance / rejection of reply to show cause notice
GST CMP-08 Quarterly Statement for payment of self-assessed tax.
GST GSTR-04 Return for Financial Year of

registered person who has opted for composition levy

or

availing benefit of notification No. 02/2019- Central Tax (Rate)

GST GSTR-9A Annual Return (For Composition Taxpayer)

GLOSSARY

CGST Central Goods and Services Tax

IGST Integrated Goods and Services Tax

CT Central Tax

UT Union Territory Tax

IT Integrated Tax

CT(R) Central Tax (Rate)

UT Union Territory Tax (Rate)

N. No. Notification Number

C. No. Circular Number

O. No.  Order Number

RODO Removal of Difficulty Order

Author Bio

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One Comment

  1. Vijayan Varghese says:

    Sir, Understand that the composition scheme is not applicable for any service provided with less than 50 lakhs turn over, if it is inter state supply!! Is it true? If so it is under which reasons? Please clarify:
    Your above Art. B.4. says:Registered person who is not engaged in making any inter-State outward supply is not eligible for this composition scheme.

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