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Do you think, that your business is more suitable for composition scheme?
Get help of Finaccle in deciding and shifting to composition scheme in a smooth manner.
2000+
50+
100%
8+ Years
Introduction
Composition scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover.
Every tax administration aims towards timely recovery of taxes, filing of returns, simplified generation and maintenance of records, invoices and others documents. Such elements are often a challenge for small businesses.
To overcome this shortcoming a composition scheme was introduced under the respective State VAT Laws with conditions applied on eligibility for the scheme accordingly. The GST Law also contains an option for a registered taxable person having turnover less than the limit to pay tax at a lower rate respect to certain specified conditions.
Eligibility
Any manufacturer or trader having a turnover of less than Rs. 1.5 crore in a preceding financial year for states and union territories not covered below can opt for the composition scheme.
In case of following states aggregate turnover (for goods and restaurant service) limit shall be Rs.75 lakh
Arunachal Pradesh
Manipur
Meghalaya
Mizoram
Nagaland
Uttarakhand
Composition Scheme - Applicable GST Rate
Type of Business
CGST
SGST
TOTAL
Manufacture and
Traders(Goods)
0.5%
0.5%
1%
Restaurants not
serving alcohol
2.5%
2.5%
5%
Opting in Procedure for already registered taxpayer:
Log in to the Taxpayer's Interface
Go to Services > Registration > Application to Opt for Composition levy
Fill the form
Conversion from regular to composition scheme by Existing Taxpayers in GST:
Any taxpayer who is registered as normal taxpayer under GST needs to file an application to opt for Composition Levy in Form GST-CMP-02 at GST Portal.
Conversion from regular to composition scheme by New Taxpayers in GST:
Any person who becomes liable to register under GST Act, need to file his option to pay composition amount in the Application in Form GST REG-01.
Stock Intimation:
Taxpayer is also required to file a Stock Intimation to furnish the details of stock held on the day immediately preceding the date from which Composition Levy is sought. Stock Intimation is to be filed within 30days of the date from which Composition Levy is sought.
The application to opt for Composition Levy is not subject to approval by the tax authorities. On filing of the application, you are marked as a composition taxpayer in the system and consequential changes are made in the system. However, in case it is found that you were not eligible for the Composition Levy or have not filed Stock Intimation, you would be compulsorily pushed out of the Composition Levy by initiating appropriate proceedings.
Returns
Composition taxpayer needs to pay tax and furnish a statement, every quarter or part thereof, as the case may be, in FORM GST CMP-08.
And further he has to furnish a return for every financial year or part thereof, as the case may be, in FORM GSTR-4.
NOTE: For current applicable timelines, refer to Important Dates section on www.gst.gov.in
Why Companies Trust Finaccle
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We provide End-to-End Support for the compliance procedure.
We ensure seamless paperwork.
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You can connect with us through mail, what’s app, call or personal visit.
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Got a question?
We've got answers.
What is the GST Composition Scheme?
The Composition Scheme is a simplified GST scheme for small taxpayers where they can pay tax at a fixed rate on turnover and avoid complex compliance and return filing.
Who is eligible to opt for the Composition Scheme?
How can I convert from regular GST to Composition Scheme?
Is stock declaration required while switching to Composition Scheme?
When can I opt for the Composition Scheme?
How can Finaccle help with conversion to Composition Scheme?
What happens if I am not eligible but opt for the scheme?