sir, please explain turnover on which tax @ 1 % levied . what includes this turnover....and other query can a composition dealer purchase from other states??~
thanks
For opting for composition scheme the turnover limit has been increased from 1 Crore to 1.5 Crore but yet to be notified.
I'll try to explain in simple words :
The logic behind the Composition levy is to reduce the headache of calculating setoff of tax liability for small tax payers i.e. working the GST collected, GST paid then offset the liability and paying the balance to Govt is now not required. Just need to work on Outward supply and pay minimal tax. ( but RCM is applicable to composition tax payers )
Composition shceme made it simple i.e Do not collect any tax from your customers and you can pay tax at a lessser rate to the Govt.
Following businesses can opt for compostion scheme -
a ) Manufacturer and trader - 1% ( CGST and SGST )
b ) Restaurants not serving alchohol - 5% ( CGST and SGST )
* Service provider cannot opt for Composition scheme.
Since tax is one of the major source of revenue for the Government if composition scheme allowed for every registered dealer then the revenue to the Govt will be at stake and hence the scheme is made available for only specific businesses.
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