Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tiresome GST formalities and pay GST at a fixed rate on turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 Crore. A servicer provider can opt composition scheme if turnover is less than Rs. 50 Lakh.
Tax payers who are NOT Eligible for opting composition scheme
- Casual taxable person or a non – resident taxable person.
- Person making Inter – State Supplies
- Business which supply goods through an e-commerce operator.
Circumstances which must be satisfied for opting Composition Scheme
- No Input Tax Credit can be claimed by taxpayer who opts composition scheme.
- Such person can not supply exempted goods.
- The tax payer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism.
- If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
- Such person has to mention the words ‘ Composition Taxable Person ‘ on every notice, Bill and signboard displayed prominently at their place of business.
- A manufacturer or trader can now also supply services to an extent of 10% of turnover, or Rs.5 lakhs, whichever is higher.
GST Rates
| Category of Registered Person | CGST | SGST | Total |
| Manufacturers or Traders | 0.50% | 0.50% | 1.00% |
| Restaurents | 2.50% | 2.50% | 5.00% |
| Service Providers | 3.00% | 3.00% | 6.00% |
Documents required for registration are same.
GSTR – 4 is the GST return need to be filed by composite dealer for every quarter.
