Composition Scheme under GST

                                    

Following topics, we will discuss in this blog (GST Registration)

ü  What is composition scheme under GST

ü  What are the benefits of composition scheme under GST

ü  Who can opt for Composition Scheme under GST

ü  How can a taxpayer opt for composition scheme?

Composition Scheme under GST:

According to the section 10 of the Goods and Service tax law contains the provision with respect to the registration of a taxpayer under composition scheme and the basic principle underlying the composition scheme under GST is to reduce the burden of compliance for small taxpayers. There are nearly 8 million taxpayers they may be migrated from the current laws into the GST regime.

In India there are many taxpayers and they will have a limited turnover and may not have the requisite resources & expertise to comply with all the procedures mentioned under the GST.

Accordingly, the government came up with a composition scheme wherein any taxpayer whose turnover is below Rs 1.0 Crore can choose not to register as a normal taxpayer. Instead, she or he may opt to get registered as a taxpayer under composition scheme and pay taxes on their supplies at a nominal rate.

As per the Central Service and Goods tax (CGST) Amendment Act, 2018, a composition dealer can also supply services to an extent of 10 % of turnover, or Rs. 5 lakhs, whichever is higher. The above-mentioned amendment will be applicable from the 01/02/2019. Further, GST Council in its 32nd meeting proposed an increase to this limit for service providers on 10th Jan 2019.

Benefits of composition scheme under GST | GST Return| GST Registration

There are some of the prominent reasons one should choose to get registered as a supplier under the composition scheme under GST.

The first benefits under the composition scheme are limited compliance under which, the taxpayer is required to furnish quarterly return only, & thus one need not worry on record keeping and can focus on their business more rather than being occupied in compliance procedures.

The second benefit under this scheme is limited tax Liability in which you may be benefited from getting registered under the composition scheme is that the tax rate for such taxpayer is nominal under the GST Law. 

Who can opt for Composition Scheme under GST?

If your turnover is below Rs 1.0 Crore can then you can opt for Composition Scheme under GST. However, if you belong to North-Eastern states & Himachal Pradesh, in that case, your limit is now around INR 75 lakh and turnover of all businesses registered with the same PAN number will be taken into the consideration to calculate turnover.

How can a taxpayer opt for composition scheme under GST?

For opting out a composition scheme under GST, a taxpayer has to file GST CMP-02 with the government and this can be done online by logging into the Goods and Service (GST) Portal.

This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for the Composition Scheme under GST.

Here is a step by step Guide to File CMP-02 on GST Portal.

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