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Composition scheme

PARTH BARMERA (11 Points)

20 June 2017

can anybody plzzz tell wht is the amount of turnover in composition scheme and eligibility for the same

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CS Nisha Nishit (Practicing Company Secretary) (326 Points)
Replied 20 June 2017

Composition Scheme under GST is for small and medium enterprises/traders or start-ups with a turnover of less than 50 lakhs ( North East states and Himachal Pradesh) or 75 lakhs ( Rest of India except J&K) per annum.

Benefits of Composition scheme

Limited compliance and limited tax liability.

No need to issue Tax invoice.

Only one return on a quarterly basis and an annual return (required to be filed).

Tax rate is minimal.

No need to maintain detailed records as in case of normal GST registered persons

To understand Suppliers who are eligible to opt for Composition Scheme, one must understand who are not eligible.

Suppliers not eligible to opt for composition scheme under GST

1. Supply of all Services except composite supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

2. Making goods on which GST is not leviable

3. Engaged in making inter-state outward supplies.

4. An e-commerce operator, who is required to collect tax at source.

5. Casual taxable person or a non-resident taxable person.

6. Not engaged in the manufacture of goods as notified under clause (e) of subsection (2) of section 10 , CGST Act, during the preceding financial year ;

Presently, GST council has recommended following manufacturers under Section 10 (2) (e) of CGST Act,

Ice cream and other edible ice, whether or not containing cocoa,
pan masala
Tobacco and manufactured tobacco substitutes.

Suppliers who are eligible to opt for Composition Scheme

1. All manufacturers except point no 6. @ 1%.

2. Composite supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration @ 2.5%.

3. Other suppliers @ 0.5%.

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Hemal Thakkar (12 Points)
Replied 20 June 2017

is composite scheme avail for goods & services both or only for goods...?

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(Guest)

Composition scheme is available only for goods, not services.

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CS Nisha Nishit (Practicing Company Secretary) (326 Points)
Replied 20 June 2017

Composite Scheme is not available for all Service Provider except composite supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration i,.e Restaurant supplying food or drinks other than alcohol can opt this facility