The Objective of Composition scheme under the GST Act, is to simplify the procedural compliance’s, particularly for the Small Tax Payers and pay GST at a Fixed rate of Turnover. The finance ministry has notified the changes decided by the GST Council, chaired by Union finance minister Arun Jaitley, held on 10th November 2017. The Government, announced various measures to reduce the GST burden on the Common man. In this Article, let us understand some common questions around Composition Scheme considering the changes made:
1. What is GST composition Scheme?
2. Who can opt for GST Composition Scheme?
The composition scheme is levied for all the business verticals with the same PAN.
Person can now opt for composition scheme till 31st March 2018.
3. Who cannot opt for the GST Composition Scheme?
4. Rate of GST Composition levy
|Nature of Taxpayer||CGST||SGST||Total|
|Manufacturers and Traders (Goods)||0.5%||0.5%||1%|
|Restaurant (Not serving Alcohol)||2.5%||2.5%||5%|
The Notification stipulates that the Manufacturers shall now pay 1% GST as against 2% earlier.
Besides, the definition of the turnover for the Traders has been defined as “Turnover of Taxable Supplies of Goods” (i.e. turnover of the exempted goods to be excluded)
5. Restrictions under the GST Composition Scheme
6. Reversal of Input Tax credit if the taxable person switches over from Regular scheme to GST Composition scheme
The balance of input tax credit after payment of such amount, if any lying in the credit ledger shall lapse.
7. Eligibility of the Input Tax credit where a taxable person, who was paying tax under the GST composition scheme, starts paying tax under the regular Scheme.
ITC shall, however not be available in respect of supply of goods/services to him after the expiry of 1 year from the date of issue of tax invoice relating thereto calculated in the prescribed manner.
8. Extended Deadlines for filing GST returns
For Turnover up to Rs. 1.5 Cr:
|Period (Quarterly)||Due Date|
|July- Sept||31st Dec 2017|
|Oct-Dec||15th Feb 2018|
|Jan- Mar||30th April 2018|
For Turnover above Rs. 1.5 Cr
|Period (Month)||Due Date|
|July- Oct||31st Dec 2017|
|Nov||10th Jan 2018|
|Dec||10th Feb 2018|
|Jan||10th March 2018|
|Feb||10th April 2018|
|March||10th May 2018|
GSTR 2 and GSTR 3 return has been suspended till further notice from the Government.
The due date for filing GSTR 4 is 18th of the month following the quarter.
|July- Sept||24th Dec 2017|
|Oct- Dec||18th Jan 2018|
|Jan- March||18th April 2018|
9. Reduction in late fee for GST returns
When a GST return is filed after due date, late fee is applicable.
The government has reduced the late fees for GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A and GSTR-6 as follows (until further notifications late fees will remain the same).
Revised late fee:
|Normal Return (GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A and GSTR-6)||Rs. 50 per day of Delay|
|Nil Return (GSTR-1, GSTR-3B, GSTR-4, GSTR-5 and GSTR-5A)||Rs. 20 per day of Delay|
The maximum late fee can be charged is Rs. 5000.
The government has waived late fees for GSTR-3B from July to September 2017. Any late fees paid for these months will be credited back to Electronic Cash Ledger under Tax. This can be later utilized for payment of GST Liability