Differences between Composition taxpayer as per section 10 of Central Goods and Services Tax Act, 2017 & Composition as per Notification No. 2/2019 -Central Tax (Rate) dated 07th March 2019.
| SI.No | Composition scheme for all | Composition scheme for supplier of service |
| 1 | Applicable as per sec 10 of the CGST act | Applicable as per Notification no 02/2019 – CT(R ) dt 7/3/2019 |
| 2 | Specifically powers from section in CGST Act | Notified category as per powers drawn by sec 9(1), 11(1), & 16(1) |
| 3 | A registered person, whose aggregate turnover in the preceding financial year did not exceed One Crore fifty lakh rupees / Seventy five lakhs for special category states except Jammu & kashmir, may opt to pay, in lieu of the tax payable by him
Threshold limit – 1.5 cror |
a registered person, whose aggregate turnover in the preceding financial year was fifty lakh rupees or below
Threshold limit – 50 Lakhs |
| 4 | Specified category of registered persons only i.e. Manufacturers, Traders & restaurant/ catering service providers | Introduced for supplier of services |
| 5 | Rate of tax payable is different for each category of specified registered persons | Rate of tax payable on supplies of goods or services is 6% i.e. CGST 3% & SGST 3% |
| 6 | To determine the eligibility – ‘Aggregate turnover’ as per sec 2(6) of CGST act of preceding financial year is considered | To determine the eligibility- “first supplies of goods or services or both” shall, for the purposes of determining eligibility of a person to pay tax under this notification, 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. |
| 7 | For the purpose of tax amount computation – Percentage of tax is to be calculated on ‘turnover in state’ as defined u/s 2(112) of CGST act. | For the purpose of tax amount computation – Tax payable under this notification shall not 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 Act |
| 8 | He 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 | He 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’ |
| 9 | He 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. | No such condition notified yet |
| 10 | Return form GSTR 4 – Quarterly | Not yet prescribed |
| 11 | After crossing 1.5 Cr. T/O limit in current FY, he should convert to normal registration | This scheme is for only upto first supply of Rs. 50 lakhs, once he crosses then normal registration
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Note – One additional condition for supplier of services composition scheme is that its not available to those who have already opted for composition scheme u/s 10
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Returns have been already prescribed for supplier of services vide Notification No.21/2019-Central Tax dated April 23, 2019. Please update the above article.