Sunday, 18 June 2017


Composition scheme is an option to small taxable person to pay tax at very low rate on the basis of turnover.
  • Small Taxable Persons having turnover upto ₹ 20 Lakhs are exempt from GST. For North Eastern States,Himachal Pradesh,Uttarakhand and Jammu & Kashmir Limit is ₹ 10 Lakhs.
  • Small Taxable Persons supplying goods upto ₹ 75 lakhs per annum are eligible for specified scheme i.e. Composition Scheme.
  • Composition Scheme can only be opted for Goods and not Services.However, Restaurants are made eligible to opt for this scheme through specific nofication.
  • Composition Scheme is available to small taxable persons only if all supplies of goods and services are within the state. They are allowed to make purchases from other states and through imports.
  • Tax rates applicable under CGST Act:- 
              Manufacturers - 1% of gross turnover
              Restaurant Service Providers - 2.5% of gross turnover
              Other Dealers/Suppliers i.e. Traders - 0.5% of                                   gross turnover
 Note- There will be equal SGST.Thus, total tax payable will be double of aforesaid rates.

For determining Turnover under composition scheme following should be included: 
                          *Turnover of all units under same pan
                          *Value of All Exempt Goods and Export
 Taxable Person under this scheme will not be allowed to take any Input Tax Credit.
  • Taxable Persons paying GST under composition scheme should issue Bill of Supply and not tax invoice.They can not show/charge GST in their invoice. 
  • Composition scheme available to the person shall lapse with effect from the date of his reaching  the threshold turnover of ₹75 lakh

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