GST Composition Scheme: Procedure for Tax Payment & Return Filing

Special Procedure For Payment of Tax And Filing Of Returns For Tax Payers Under Composition Scheme

Introduction:

In order to provide relief of compliance and cumbersome procedure for small tax payers GST has introduced the scheme of composition. Under this scheme, a tax payer with few restrictions can operate easily in the business with reduced compliance. This scheme of composition is optional for tax payers. Tax payers depending upon the business complexity and availability of credit can decide on whether to opt for composition scheme or not.

On introduction of GST the tax payers who opted composition scheme are liable to pay tax without collection of tax from customers and cannot avail input tax credit. They have to file the returns quarterly. The due date for payment of tax and filing of returns is 18^th day of month succeeding the quarter. For example, in case of quarter starting from July 1 2018 to September 30 2018, the due date of payment of tax and return is 18^th October 2018.

Another significant point to be noted is that the tax payers opted for composition scheme are also liable to pay tax under reverse charge mechanism u/s.9(3) and 9(4) (Currently under abeyance).

Recent notification on special procedure Not. 21/2019 for FY 2019-20:

Recently central government has notified a special procedure for payment of tax and filing return of income through notification 21/2019 on 23-04-2019 for tax payers. The procedure requires tax payers to pay the tax quarterly by filing a statement (GST CMP – 08) relating to output made (sales/services made) and filing the returns annually (GSTR – 4). This procedure is applicable from Financial Year 2018-19.

Applicability:

This notification for special procedure is applicable for following persons:

1. Persons who opted for composition scheme under section 10;

2. Persons who are eligible to pay tax @ 6% on first supplies of goods or services or both up to an aggregate turnover of Rs. 50 Lakhs (Notification 02/2019 – Central Tax (Rate)).

Procedure:

The above persons on every quarter shall furnish a statement containing the details of payment of self-assessment tax in Form GST CMP – 08 before 18^th of month succeeding the quarter. For example, in case of quarter starting from October 1^st 2018 to December 31^st 2018, the due date of payment of tax and return is 18^th January 2019. On furnishing the statement, the total liability of tax and interest should be paid through payment of cash.

Details to be furnished in GST CMP – 08:

The major details to be furnished in statement are as follows:

1. Outward supplies including exempt supplies

2. Inward supplies attracting reverse charge including import of services (reverse charge mechanism)

3. Total tax payable

4. Interest payable

Important points to be noted:

• The amount of outward supplies and amount taxable under reverse charge mechanism reflected shall be reported after adjusting advances, credit notes, debit notes and other adjustments due to amendments
• If the amount reported is a negative value, even then the value should be reflected and shall be carried forward to next tax period for utilizing the same.
• A nil statement has to be filed if there is no tax liability due during the quarter

Return to be furnished annually (GSTR – 4)

The above referred persons shall furnish GSTR 4 as a return annually on or before 30^th April of subsequent financial year.

The GST law & GSTN has initially created so many clinches and hardships to tax payers. However, these steps by the department would really help the genuine tax payers to find relief and ease of business.