Eligibility for Composition Scheme
First, ensure that you meet the eligibility criteria for the composition scheme:
- Turnover limit: The aggregate annual turnover should be below ₹1.5 crore (₹75 lakhs for special category states).
- Type of business: It is available for manufacturers, traders, and small service providers (with some exceptions like e-commerce operators and service providers other than restaurant services).
- Tax rates: Businesses pay tax at a lower fixed rate (1% for manufacturers/traders, 5% for restaurants, 6% for service providers).
Steps to Apply for GST Registration (Composition Scheme)
1. Online Application on GST Portal
- Visit the GST portal.
- Select "New Registration" and fill in basic details such as PAN, email ID, and phone number.
- An OTP will be sent to verify the email and mobile number.
- Choose the "Composition Scheme" option while filling out the details.
2. Filling Out GST REG-01 Form
- Once basic details are verified, proceed with filling the GST REG-01 form.
- Under this form, you’ll need to provide:
- Business name, address, and nature of business.
- PAN, Aadhaar, and other identification details.
- Details of the place of business (if renting, you’ll need a rent agreement; if owned, provide property tax receipts).
- Bank account details.
- Details of business partners/directors, if applicable.
Important: While filling out the application, select the composition scheme to be eligible for lower tax rates.
3. Upload Documents
- Upload the necessary documents like:
- PAN card of the applicant.
- Aadhaar card.
- Proof of business address (electricity bill, property tax receipt, rent agreement, etc.).
- Bank statement or canceled cheque.
- Passport-sized photograph.
4. Submit the Application
- After filling in the details and uploading the documents, submit the application.
- Once submitted, you’ll receive an Application Reference Number (ARN) via email and SMS for tracking the status of your application.
5. Application Review and Verification
- The GST officer will review your application and documents.
- The officer may either approve or reject the application based on the information provided.
Is an Inspection Required?:
- Inspection is generally not required for composition scheme registration.
- However, if the GST officer finds any inconsistencies in the documents, address, or business details, they may initiate an inquiry or even a physical verification of the premises.
- In most cases, if the documents are clear and complete, no personal inspection is carried out.
6. GST Registration Approval
- If everything is in order, the GST officer will approve your application, and you will receive the GSTIN (Goods and Services Tax Identification Number).
- You’ll also receive the GST Registration Certificate (Form GST REG-06) online.
7. Intimation of Composition Scheme Selection
- Once the registration is approved, you need to file GST CMP-02 to inform the authorities that you are opting for the composition scheme.
- This form must be filed before the start of the financial year (or when you begin business).
8. Compliance After Registration
- After registering under the composition scheme, you are required to:
- File quarterly returns in GST CMP-08.
- File an annual return in Form GSTR-4.
- Pay tax at the prescribed composition rates.