Composite Scheme of GST पर सरकार ने लिया बड़ा फैसला, जानें क्या होंगे 3 प्रमुख प्रभाव

Composite Scheme of GST, Under GST, the Composition Scheme is a straightforward and uncomplicated program for taxpayers. Difficult GST procedures can be eliminated for small taxpayers who can pay GST at a specific turnover rate. Any taxpayer with a yearly revenue under Rs. 1.5 crore* is eligible to participate in this initiative. You can use the GST search tool to find out if a taxpayer chose a composition plan or not. Input any GSTIN and look up the “Taxpayer Type” column in the results to see if the taxpayer chose the composition scheme or is a normal taxpayer.

Who can opt for the Composition Scheme?

A taxpayer may choose the Composition Scheme if their annual revenue is less than Rs 1.5 crore*. The current maximum is Rs 75* lakh for Himachal Pradesh and the northeastern states. A composition dealer may additionally provide services up to 10% of sales, or Rs. 5 lakhs, whichever is larger, in accordance with the CGST (Amendment) Act, 2018.

This change will take effect on February 1st, 2019. Additionally, on January 10, 2019,*, the GST Council suggested raising this cap for service providers during its 32nd meeting. When calculating turnover, any company registered under the same PAN should have its turnover included.

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Who cannot opt for the Composition Scheme

The following individuals are unable to participate in the program:

• Producer of tobacco, pan masala, or ice cream.
• An individual producing exempt or interstate supplies.
• Either a non-resident taxable person or a casual taxable person.
• A person who provides services via an online retailer must collect TCS in accordance with CGST Section 52.
• A producer of such products or a provider of such services who has been notified by the government based on the GST Council’s recommendations.

What are the conditions for availing Composition Scheme?

The conditions listed below must be fulfilled in order to select a composition scheme:

• A dealer who chooses the composition scheme is not eligible to receive the input tax credit.
• The merchant is unable to supply alcohol and other commodities that are not subject to GST taxes.
• For transactions made using the Reverse Charge Mechanism, the taxpayer must pay tax at regular rates.
• A taxable person must register all of their enterprises under the system together or choose to opt-out if they have several company sectors (such as food, textiles, and electrical accessories) under the same PAN.
• The phrase “composition taxable person” must be displayed on all signs and signboards visible to the public at the taxpayer’s place of business.
• The phrase “composition taxable person” must appear on all of the taxpayer’s bills of supplies.
• A producer or merchant may now provide services up to 10% of sales, or Rs. 5 lakhs, whichever is larger, in accordance with the CGST (Amendment) Act, 2018. This change will take effect on February 1st, 2019.

How can a taxpayer opt for a composition scheme?

A taxpayer must submit a GST CMP-02 to the government in order to choose the composition scheme. By signing in to the GST Portal, you may do this online. A dealer who wishes to choose the Composition Scheme should provide this notification at the start of each fiscal year. This is a detailed guide on how to file CMP-02 on the GST Portal.

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How Should a Composition Dealer Raise Bill?

A composition merchant is not permitted to issue a tax invoice. This is because it is illegal for a composition dealer to impose taxes on their customers. They are responsible for paying their own taxes. As a result, the dealer must provide a Bill of Supply. Additionally, the dealer should state at the top of the Bill of Supply that they are a “composition taxable person, not eligible to collect tax on supplies.”

How should a composition trader pay GST?

The cost of the supplies must be paid for out of pocket, including GST. The following is included in the GST payment that a composition dealer must make:

• GST on manufactured goods.
• Reverse charge tax
• Purchase tax from an unregistered vendor

What are the returns to be filed by a composition dealer?

By the 18th of the month after the end of the quarter, a dealer must pay taxes on a quarterly statement (CMP-08). Additionally, starting with FY 2019–20, a return in form GSTR-4 must be made by April 30 of the following fiscal year. The yearly GSTR-9A return must be submitted by December 31 of the next fiscal year. For FY 2017–18 and FY 2019–20, it was waived. Additionally, keep in mind that a dealer licensed under a composition scheme is exempt from keeping thorough documents.

What are the advantages of the Composition Scheme?

The benefits of enrolling under the composition system are as follows:

• Reduced adherence to regulations (returns, bookkeeping, invoice issuing)
• Minimal tax obligation
• High liquidity due to reduced tax rates

What are the disadvantages of the Composition Scheme?

Now let’s examine the drawbacks of signing up for the GST composition scheme:

• A small business area. The dealer is prohibited from doing transactions over state lines.
• Composition dealers are not eligible for the Input Tax Credit.
• Alcohol and products purchased through an online store are examples of non-taxable commodities that the taxpayer is not permitted to offer under GST.

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Faq’s

Q. What is the rate for the GST composition scheme?

Ans: The GST composition scheme rate for dealers and manufacturers is 1%. The GST composition scheme rate for other service providers is 6%, whereas the GST composition rate for restaurants that do not serve alcohol is 5%.

Q. GST composition scheme turnover cap

Ans: The current GST composition plan turnover cap is Rs. 1.5 crore.

Q. What is the GST composition scheme?

Ans: The term “composition scheme” in GST refers to a streamlined GST compliance program for qualified taxpayers, which allows them to file returns quarterly rather than monthly and pay a reduced turnover tax rate.

Q. Who is qualified for the GST composition plan?

Ans: The GST composition plan is available to companies that sell products and services and have an annual total revenue of less than Rs. 1.5 crore.

Q. What is the GST composition plan, for instance?

Ans: Anjali, for instance, sells watches and table clocks and has chosen the composition scheme. In contrast to the 18% GST rate that is typically applied to watches, the composition scheme tax rate for goods traders is 1%.

@PAY