GST Composition Scheme

For taxpayers, the GST Composition Scheme is a straightforward and uncomplicated option. Small taxpayers can avoid time-consuming GST formalities by paying GST at a certain percentage of turnover instead. Any taxpayer with a turnover of less than Rs. 1.5 crore* may choose this program.

Who Can opt this scheme?

A taxpayer who chooses the composition scheme must have a turnover of less than Rs. 1.5 crore*. The cap has been raised to Rs. 75* lakh for Himachal Pradesh and the North-Eastern states. A composition dealer is also permitted to provide services under the CGST (Amendment) Act, 2018, up to 10% of turnover or Rs. 5 lakhs, whichever is higher. This modification will take effect on February 1st, 2019. Additionally, the GST Council in its 32nd meeting suggested raising this cap for service providers on January 10, 2019*. Turnover should be calculated taking into account all firms registered with the same PAN.

Who cannot opt the scheme?

The following individuals cannot sign up for the program:

manufacturer of tobacco, pan masala, and ice cream

someone who manufactures interstate supply

a temporary taxpayer or a non-resident taxpayer

Businesses that provide products via an online retailer

Condition for availing composition scheme

When choosing the composition plan, a dealer cannot claim any Input Tax Credits.

Alcohol and other items not subject to GST cannot be supplied by the dealer.

For transactions covered by the Reverse Charge Mechanism, the taxpayer is required to pay tax at the standard rates.

A taxable person must register all such enterprises collectively under the scheme or choose to opt out of the plan if they operate various business sectors (such as textile, electronic accessories, grocery, etc.) under the same PAN.

The phrase "composition taxable person" must appear on every notice or signboard that is clearly posted at the taxpayer's place of business.

The phrase "composition taxable person" must appear on every notice or signboard that is clearly posted at the taxpayer's place of business.

Every bill of supplies the taxpayer issues must include the words "composition taxable person."