🔒

^®

Subscribe Free GST updates on...

Subscribe to Best GST Library of India and get ahead of the rest. Click here for plans.

 

 Composition Scheme under GST?

What is composition scheme under GST?

A taxpayer opting for composition scheme can pay GST at his outward supply at the fixed rate of GST as prescribed under Rule 7 of CGST Rules (see below).

 

What is the turnover limit for compisition levy under GST?

Can a business having one PAN but two or more GSTINs opt for composition scheme for one GSTIN only? 

No. As per proviso to Section 10(2) of CGST Act, where more than one registered persons are having the same PAN, the registered person shall not be eligible to opt for the composition scheme unless all such registered persons opt to pay tax under composition scheme. That means taxpayer can not pick and choose GSTIN for composition scheme. He has to opt the scheme for all GSTIN having same PAN.  

 

Can composite taxpayer provide services also?

As per second proviso to Section 10(1) of CGST Act, a person who opts to pay tax under section 10(1) may supply services of value not exceeding 10% of turnover in the preceding financial year or Rs. 5 Lakh, whichever is higher.

Explanation.––For the purposes of second proviso, the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover.

 

Can composite taxpayer make inter-state supply?

No. As per section 10(2) of CGST Act, composite taxpayer cannot make any inter-state outward supply.

However there is no such restriction for inter-state inward supply.   

 

Can composite taxpayer collect GST from customers?

No. As per section 10(4) of CGST Act, a composite taxpayer shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

 

Can composite taxpayer issue tax invoice?

No, a composite taxpayer can not issue tax invoice. Composite taxpayer can only issue "Bill of Supply" and that too without GST. 

 

Who can opt for Composition Scheme?

Manufacturer, trader of goods and Restaurants (except restaurants serving alcohol) can opt for composition scheme under section 10 of CGST Act.

 

What is Form GSTR-4?

As per Rule 62(1) of CGST Rules, every composite taxpayer is required to furnish a return for every financial year in FORM GSTR-4.

 

Due date for FORM GSTR-4?

As per Rule 62(1) of CGST Rules, the standard due date to file FORM GSTR-4 is 30th day of April following the end of relevant financial year. However the due date for Financial Year 2018-19 has been extended by CBIC upto 31st August 2020 vide Notification No.59/2020.

 

What is FORM CMP-08?

In addition to annual return in FORM GSTR-4, Composite taxpayer is also required to furnish a statement every quarter containing the details of payment of self-assessed tax in FORM GST CMP-08, till the 18th day of the month succeeding such quarter.

 

Due date for FORM CMP-08?

As per Rule 62(1) of CGST Rules, standard due date to file FORM GST CMP-08 is 18th day of the month succeeding the relevant quarter.

 

Can composite taxpayer discharge his outward liability from credit ledger?

As per Rule 62(2) of CGST Rules, every registered person furnishing the statement under rule 62(1) (i.e. GSTR-4 and GST CMP-08) shall discharge his liability towards tax or interest payable under the Act by debiting the electronic cash ledger. 

It is to be noted that composite taxpayer can discharge his tax and interest liability from cash ledger only. He is not allowed to discharge the same from credit ledger becuase composite taxpayers cannot avail any ITC.

 

Rate of Tax applicable for Composite taxpayers?

As per Rule 7 of CGST Rules, below are the tax rates applicable for composite taxpayers.

Sl. No.	Section under which composition levy is opted	Category of registered persons	Rate of tax
(1)	(1A)	(2)	(3)
1.	Section 10(1) & 10(2) of CGST Act	Manufacturers and Traders - (For Goods)	1% (0.5% CGST + 0.5% SGST)
2.	Section 10(1) & 10(2) of CGST Act	Restaurant (except restaurants serving alchohal)	5% (2.5% CGST + 2.5% SGST)
4.	Section 10(2A) of CGST Act	Composite taxpayers providing services as per second proviso to section 10(1) of CGST Act - (For Services)	6% (3.0% CGST + 3.0% SGST)

 

Whether composite taxpayer is liable to pay reverse charge?

Yes, like a regular taxpayer, composite taxpayer is also liable to pay reverse charge at the applicable rates (wherever applicable). However compoosite taxpayer cannot avail ITC of the reverse charge paid by him.

Well drafted. Good information

Tax rate for dealers under composition scheme : for Manufacturers and others excluding traders is 1% of Turnover but for traders the rate is 1% of Taxable Turnover.It should be mentioned.

Good morning

Govt defers implementation of Special Registration, Return Filing For Pan Masala, Gutkha Companies till May 15.

12 Apr 2024   4.39k

Amid GST portal deficiency, GSTN recommends extension of GSTR-1 due date for the month of March.

12 Apr 2024   4.75k

GSTN Advisory on new feature of Auto-population of HSN summary from e-Invoices to GSTR-1

9 Apr 2024   5.27k

CBIC waives interest for specified taxpayers for late filing of GSTR-3B due to portal technical glitches during specified months.

9 Apr 2024   6.17k

GSTN requests taxpayers to check their email and refile their GSTR-3B within 15 days from date of email.

9 Apr 2024   10.36k

Quick Links

GST Library

Login
Register
About GST Library
Subscription (Pricing)
GST Updates
GST Calendar
GST Case Laws
GST Case Laws Sitemap
Full Site Search
GST Vides

GST Notifications
GST Act & Rules (Section-wise)
GST Act & Rules (Chapter-wise)
GST Forms
GST Forms (Category-wise)
GST Rates
Classification by CTA (Chapter-wise)
Classification by CTA (Search Tool)
E-way Bill
Finance Bill

E-invoice Applicability Calculator
Inverted Duty Refund Calculator
GST Set-off Calculator
ITC Reversal Calculator
GSTR-3B Manual
GSTR-9 Manual
GSTR-9C Manual

Others

GST e-books
GST Domains Sale
About Us
Our Services
Contact Us
Privacy Policy
Terms & Conditions

taxreply.com © 2024. All Rights Reserved