GST brings developed new business regime in India. Specially in case of compliance for doing business in India. Under Composite Scheme payer will be required to file summarized return on quarterly basis instead of three monthly return in a month
Composite Scheme under GST regime is an option and available to the taxable person.
There are three possible conditions under which option of Composition Scheme can be exercised:-
1. Taxable person migrating from existing registration can opt composite scheme. He can opt option prior to appointed date or within 30 days after the appointed date. In this case composite scheme shall be deemed to effective from the appointed date.
2. Taxable person obtaining new registration:- such option can be exercised at the time of obtaining registration under section 22. In this case effective date will be the date of registration.
3. Taxable person paying tax under normal scheme:- normal taxable person can opt composition scheme in next financial year. Such option can be exercised by filing of intimation in prescribed form prior to commencement of the year. In this case, the option to pay tax under composition scheme shall be effective from the beginning of the financial year.
Once granted, the eligibility would be valid unless the permission is cancelled or is withdrawn or the person become ineligible from the same.
The option of scheme is qua-taxable person and not qua class of goods, therefore once opted it will be applicable on all supplies by a taxable person. Means a taxable person cannot opt a composite scheme of one class of goods and opt for regular scheme for other class of goods.
Taxable person dealing in goods only can apply/avail composition scheme.
Supplier of service can not opt composite scheme. However supplier of composite supply (by way of or as part of service)can opt composite scheme.
The tax rate under composition scheme will be as under:-
|Sr. No.||Category of registered person||Rate of CGST||Rate of SGST||
|2||Food and Restaurant Services||
Turnover for Composition Scheme
A taxable person/registered person whose turnover does not exceed Rs.75 lakhs in the preceeding financial year can opt composite scheme.
1. Restriction from making supply of goods which are not liable to GST:- A taxable person under composite scheme cannot supply those goods which are not leviable under GST Act. Eg. Petroleum, Alcohol for human consumption etc.
2. Restriction on inter-state supply:- A taxable person is not allowed to inter-state supply. However there is no restriction on inter-state procurements and inter barter transactions.
3. Restriction from making supply through E-commerce operator:- Under composition scheme a taxable person cannot supply goods through e-commerce operator unless such portal is owned by the same person.
4. Scheme will be applicable for all transaction under the same PAN even on business verticals under same PAN.
5. Not entitled for input tax credit:- Taxable person under composition scheme will not be allowed to claim any input tax credit.
However, if the taxable person ineligible to remain under composition scheme, the taxable person will become entitled to input tax in respect of input held in stock the date will be the day immediately preceding the date from which he becomes liable to pay tax under section 9.
6. No collection of tax:- Though the rate of composition scheme is kept very nominal( 0.5%, 7%, 2.5%) a taxable person under composition scheme is not allowed to recover such tax from his buyer.
A normal tax payer is required to submit a minimum three returns under or monthly basis and one yearly consolidated return. Under composition scheme a tax payer is required to file one return under each quarter.
GST composition scheme transitional provision provides for allowance of credit of eligible duties and taxes on inputs held in stocks subject to certain conditions.
Supplier issued Bill of Supply when when he supply is under composition scheme and supplier is not allowed collect tax under composition scheme. Format of Bill of supply is as under: