Composition Scheme is uncomplicated and simple scheme under GST for small taxpayer. They can get relaxation from monotonous GST formalities and can also pay tax at a fixed rate of Turnover. This scheme is only applicable to those whose turnover is not exceeding Rs. 1.5 Crores.
ELIGIBLITY FOR COMPOSITION SCHEME:
A taxpayer whose turnover is less than Rs. 1.5 Crores can go for composition scheme, in case the taxpayer is from North Eastern States and Himachal Pradesh then the limit will be Rs. 75 Lakhs. A composition dealer is allowed to supply the services in the range of ten percent of turnover or Rs. 1.5 crores, whichever is higher as per the CGST (Amendment) Act, 2018. This amendment will take effect from 1st February, 2019. After that in 32nd meeting of Council on 10th January, 2019 proposed for an increment in this limit for service providers.
INELIGIBLE PERSON FOR COMPOSITION SCHEME:
The following person cannot opt for the composition scheme:
Composition Scheme under GST Services:
|TYPES OF BUSINESS||CGST||SGST||TOTAL|
|MANUFACTURER AND TRADERS OF GOODS||0.5%||0.5%||1.0%|
|RESTAURANTS WHICH ARE NOT SERVING ALCOHOL||2.5%||2.5%||5.0%|
CONDITION FOR AVAILING COMPOSITION SCHEME:
HOW CAN THE TAXPAYER SHALL OPT FOR THIS SCHEME?
The person who wants to opt for this scheme will have to file Form GST CMP-02 with the government, he can also file his on GST Portal by logging in. This communication shall be done by the person at the start of the every financial year that the person wants to opt for the scheme.
ADVANTAGES OF COMPOSITION SCHEME:
There are following advantages of availing composition scheme:
DISADVANTAGES OF COMPOSITION SCHEME:
There are following disadvantages of availing composition scheme:
Author- Adv.Shivam Kumar
Legel and content Executive, Taxblock India Pvt. Ltd