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GST Composition Scheme Registration
GST Composition Scheme Registration
With changes in indirect taxation every tax payer is required to do compliance’s such as monthly payment of taxes , timely filing of statutory GST returns , maintaining prescribed record as per law. To make the compliance part easier for business persons a Composition scheme under Sec 8 is given, Under which c a taxpayer is eligible to pay taxes to government at certain percentage of his turnover and not allowed to take input tax credit. With a aim of one nation one tax this composition scheme enables less compliance’s to business as compared to earlier laws. Dealer shall electronically file an intimation in FORM GST CMP-01, duly signed, on the Common Portal, either directly or through a Facilitation Center.
Eligibility for GST Composition Scheme Registration
The taxable persons having Aggregate annual turnover of Rs. 50 lakhs are proposed to be made eligible for Composition.
- Thresholds limit of aggregate Turnover Rs.50 Lac
- Scheme to be opted for all Units under same PAN
- Tax would be paid not less than 1%
- Tax would not be charged and collected from Customer
- Not entitled to take input tax credit
Key Highlights of GST composition levy
Tax Rate
Rate not more than 1% for manufacturer, 2.5% for restaurant sector and 0.5% for other suppliers of turnover.
Penalty
Where taxable person is found not eligible for scheme in that case officer may ask for penalty then the tax authorities can impose a penalty equal to differential tax along with penalty.
Applies to Sales with in State
Local suppliers, i.e., those who supply within a state can only take advantage of this scheme. Inter-state suppliers will come under regular GST laws.
Turnover Limit
If the turnover of assessee opting composition scheme exceeds Rs.50 Lakhs during the year, he will be shifted to normal Scheme automatically.
Quarterly Return
GSTR-4 has been prescribed by the government as a tax return form to be filed by a dealer under Composition Scheme.
Minimum Requirements
Only one person is required to start a proprietary business. There is no need to perform and submit an audit annually unless turnover crosses specified limit or like a Private Limited or Limited Liability Partnership the proprietary firm is not required to filling at Ministry of Corporate Affairs.
GST Rate under Composition Scheme
S.NO
1.
2.
3.
Manufacturers, other than manufacturers of such goods as may be notified by the Government
Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II
Any other supplier eligible for composition levy under section 10 and these rules
1%
2.50%
0.5%
Return Filing Under Composition Scheme
Under GST Law Composition scheme introduced to reduce the compliance part for the registered taxable person , under this scheme registered taxable person need to file quarterly GST return within eighteen days after the end of relevant quarter. GSTR-4 has been prescribed by the government as a tax return form to be filed by a dealer under Composition Scheme. In this return registered taxable person need to fill the amount of total turnover of supply during the period along with the details of tax paid. Dealer also need to give information about invoices-level purchases.