Composition scheme

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2017 Dear sir
Taxable nontaxable good sales how can taxes paid total turnover tax or only taxable turnover tax lagse

Arun Kumar Singh

Arun Kumar Singh (Expert)
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15 July 2017 All taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2017 Dear sir
My business kariyan store in this so many items taxable and not taxable item sales.
i can composition scheme take it?. in composition Scheme i have tax paid both item non taxable good (total turnover) and taxable goods.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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20 July 2024 Under the Composition Scheme of GST in India, here's how the taxation and turnover calculation generally work:

### Taxable and Non-Taxable Goods Sales

1. **Taxable Turnover**:
- Taxable turnover refers to the value of goods or services on which GST is applicable.
- For goods/services subject to GST, composition dealers pay tax at a fixed percentage of this turnover under the Composition Scheme.
- They cannot charge GST from their customers separately.

2. **Non-Taxable Turnover**:
- Non-taxable turnover includes the value of goods or services that are exempt from GST or outside the purview of GST.
- Examples include basic food items, healthcare services, etc., which are exempt or not covered under GST.
- Composition dealers do not pay GST on non-taxable turnover because GST is not applicable on these items.

### Composition Scheme Eligibility and Tax Paid

1. **Eligibility**:
- Small businesses with an aggregate turnover up to Rs. 1.5 crore (Rs. 75 lakh for special category states) in the previous financial year can opt for the Composition Scheme.
- Certain businesses, such as service providers, manufacturers of notified goods, interstate suppliers, etc., are not eligible.

2. **Tax Paid Under Composition Scheme**:
- Dealers opting for the Composition Scheme pay tax at a fixed percentage (1% for traders, 5% for restaurants, and 6% for manufacturers) of their taxable turnover.
- They do not collect GST from customers separately but bear the GST liability themselves.
- Tax paid under the Composition Scheme is only on the taxable turnover, i.e., the turnover of goods/services subject to GST.

3. **Non-Taxable Goods**:
- Non-taxable goods are not subject to GST, so no GST is paid or collected on the turnover from these items.
- The turnover of non-taxable goods does not contribute to the calculation of tax liability under the Composition Scheme.

### Conclusion

If your business involves both taxable and non-taxable goods, you can opt for the Composition Scheme if your taxable turnover does not exceed the prescribed limits. Under this scheme, you will pay GST only on the taxable turnover at a fixed rate applicable to your business category (trader, manufacturer, or restaurant). Non-taxable goods do not attract GST, and their turnover is not considered for GST calculation under the Composition Scheme. It's advisable to consult with a GST expert or a Chartered Accountant to ensure compliance and understand the specific implications for your business.