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In order to ease the process of paying GST, the GST Council has established a simple and easy Composition Scheme for small taxpayers. Small taxpayers are simply allowed to pay GST at a fixed rate of turnover. CBIC has increased the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores. As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. In addition, service providers can also opt into the Composition Tax Scheme. The threshold turnover for service providers has to be at least Rs. 50 lakhs to be eligible.
The following assessees cannot opt for GST Composition Scheme:
Composition Scheme - Applicable GST Rates
|Manufacturers and Trader||0.5%||0.5%||1.0%|
|Restaurants not serving alcohol||2.5%||2.5%||5.0%|
|Other Service Providers||3.0%||3.0%||6.0%|
The GST payment comprises of:
A dealer cannot issue a tax invoice since he/she is paying tax out of their own pocket, neither can they charge tax from their customers. Therefore, the dealer has to issue a Bill of Supply.
An assessee is required to file a quarterly return (GSTR-4) by 18th of the month after the end of the quarter. The annual return GSTR-9A has to be filed by 31st December of next financial year.
The merits of this scheme are:
The demerits of this scheme are:
What are the due dates for GST Composition Scheme?
The due date for filing GSTR-9, GSTR-9A and GSTR-9C has been extended till 30th June 2019 by CBIC for FY 2017-18 and the due date for GSTR-4 for the period Oct-Dec 2018 is 18.01.2019.
What is turnover?
Turnover is the overall sales of a dealer in a single financial year.
How can a dealer opt for GST Composition Scheme?
A dealer can opt for composition scheme online by logging into the GST Portal.
What does CBIC stand for?
CBIC stands for the Central Board of Indirect Taxes and Customs.