Who can opt for GST composition scheme?

Not every taxable person is entitled to opt GST composition scheme. Only taxpayers having aggregate turnover less than Rs 100 lakhs (in case of Special category states, the limit is Rs 75 lakh) in a financial Year can opt for composition scheme. The aggregate turnover shall be calculated by considering all business registered with the same PAN number.  This article will provide you with what Returns A Composition Dealer needs to File.

However, the following persons are ineligible to opt GST composition scheme:

  • A supplier of exempt Supplies
  • A person engaged in supply of services (expect restaurant business)
  • A producer of of ice-cream, pan masala, or tobacco
  • A Non- resident taxable person
  • A Casual taxable person
  • Businesses supplying goods through an e-commerce operator

Returns under GST composition scheme

Under the normal provisions of the GST law, a registered taxable person is required to file 3-4 monthly returns. In order to reduce the tax compliance for the small taxpayers GST composition scheme was introduced, under this scheme, a composition taxable person is required to file GST returns once every quarter. GSTR 4 is required to be filed by 18th of the month following the relevant quarter.

  • A composition taxable person shall file a return for each quarter in the prescribed manner and in the in the prescribed form by 18th of the month following the relevant quarter.
  • The government has prescribed GSTR-4 as a GST return form to be filed by a taxable person opted for Composition Scheme.
  • Composition taxable person is required to file the first return for the period beginning from the date on which the said person become a registered taxable person till the end of the quarter in which the registration has been granted.
  • Apart from the quarterly return, an annual return GSTR 9A is also required to be filed composition taxable person by the 31st December of next financial year.

GST return can also be filled with the help of GSTR 4 offline tool based on excel worksheets. The offline GST tool is offered for simplifying GST returns filing for the GSTR 4 returns.

GSTR 4 has a 13 headings, a taxable person registered under the composition scheme is need not worry as most of these will be pre-filled. However, it’s important to understand certain terms:

1. GSTIN– Goods and Services Taxpayer Identification Number

2. UIN– Unique Identification Number

3. UQC– Unit Quantity Code

4. POS– Place of Supply of Goods and Services

5. B2B– Business to Business (one registered person to another registered person)

6. B2C– Business to Customer (registered person to unregistered person)

7. HSN– Harmonised System of Nomenclature

8. SAC– Services Accounting Code

GSTR 4 is required to be filed on a quarterly basis.

The due date for filing GSTR 4 is 18th of the month following the relevant the quarter.

Period Due Date
April to June 2018 18th July 2018
July to September 2018 18th October 2018
October to December 2018 18th January 2019*
January to March 2019 18th April 2019*

* the due date for GST return filing is subject to change, as recommended in 27th GST council meeting.

Interest on Late Payment

Where a taxable fails to pay the taxes before the due dates, then the person is liable to pay interest at 18 % per year. The interest is to be calculated taking the number of days the taxpayer missed out.

What are the advantages of GST Composition Scheme?

The following are the advantages composition scheme:

  • Lesser compliance
  • Minimum tax liability
  • High liquidity as taxes are at a lower rate

Checkout GST Composition Scheme Limits here

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Qualification: CA in Practice
Company: Taxguru / Sandeep Kanoi & Associates
Location: Mumbai, Maharashtra, IN
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One Comment

  1. JAINUDIN LAXMIDHAR says:

    THIS IN REFERENCE TO COMPOSITION SCHEME OF GST. WHEN STONE QUARRY OWNER GET HIS RAW MATERIAL FROM LEASEHOLD LAND GIVEN BY GOVT AND PAID ROYALTY ON TONNAGE ,THEN CRUSHED STONE TO GET GREET. WHETHER QUARRY OWNER ELIGIBLE FOR COMPOSITION SHCEME ?

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