GST Composition Scheme for Services Sector
In line with the GST Council Meeting held on 10th Jan 2019, Service Providers can opt into the Composition Tax Scheme. In order to implement the said decision of Goods and Service Tax Council, the Central Board of Indirect Taxes and Customs have issued a notification no. 2/2019-Central Tax (Rate) dated 7th March 2019.
Condition for Availment of Composition Scheme –
1. Ice cream and other edible ice, whether or not containing cocoa
2. Pan masala
3. All goods i.e. tobacco and manufactured tobacco substitutes
To opt for this Composition Scheme a taxpayer has to file GST CMP-02 online by logging into the GST Portal. latest by 30th April, 2019.
In case business in new and a fresh registration is obtained, the Taxpayer can opt for composition scheme at time of registration in FORM GST REG- 01.
RATE OF TAX UNDER COMPOSITION SCHEME FOR SERVICES
Services Except Restaurant Service
The said scheme shall be applicable to both service providers as well as suppliers of goods and services, who are not eligible for the presently available composition scheme for goods.
A composition dealer cannot issue a tax invoice as they cannot charge tax from their customers. Hence, the dealer has to issue a Bill of Supply. The dealer should also mention “composition taxable person, not eligible to collect tax on supplies” at the top of the Bill of Supply.
A composition dealer pays GST on the following:
1. GST on supplies made.
2. Tax on reverse charge
A composition dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. An annual return GSTR-9A also has to be filed by 31st December of next financial year.