GST Composition Scheme in India

GST Composition Scheme in India

Importance of GST Composition Scheme

what is GST composition scheme? Routine recovery of taxes, return filing, generation and maintenance of records, invoices and other documentation is the job of tax administration but more often this thing becomes a burden for small businesses. To short out this burden composition scheme has been introduced by GST under their respective State VAT laws with few condition and eligibility. GST composition scheme gives relaxation to the person who has a turnover less than a limit with the specified condition. below get more information about GST Composition Scheme.

What is GST Composition Scheme?

GST composition scheme is relaxation that will be given by tax authority to the taxpayer, after informing their intention or eligibility but if the taxpayer didn’t inform then he will be treated as a normal taxpayer, the person will not able to get benefits of GST Composition Scheme.

-Tax rate under GST Composition scheme and turnover limitWho can’t get the benefit of composition scheme?? Following taxable persons are not granted permission to opt for the scheme who: In case if taxable person has business in various sector with the same PAN, he must register all business under the scheme If a person has different business segments: He must go collectively for the scheme or go for as a normal taxable person.

-No Tax, No Credit what it means?Less Documentation : In the comparison of a normal taxpayer, composition taxpayer must file their return quarterly means 4 times in a year on the other normal taxpayer must file return 37 times in a whole year. It gives a huge relax to a taxpayer under composition scheme, Instead of doing documentation they can focus on their business. For online GST registration under Composition Scheme click here!!

-No Credit of Input Tax: If any business organisation having a relaxation under composition tax scheme. In case a person following Business 2 Business (B2B model), So composite taxpayer doesn’t have permission to get input tax from any out person. It means all input tax should be paid by Composite Taxpayer only.

-No Collection of Tax: Same like input tax Composite Taxpayer can’t issue tax payable invoice and they can’t take tax from their belonging customer. I t means the burden of all the taxes will be bare by Composite taxpayer only.

1. 50 Lakh is the turnover limit now proposed limit is Rs. 75 lakh.
2. Tax rate will be 1% for manufacturer
3. 5% for restaurants.
4. For suppliers, 0.5% tax will be charged.
5. Supplies goods not come under the Act
6. Service providers
7. Intrastate supply(export/import).
8. E-commerce business operator.
9. Textile
10. Electronics and accessories
11. Groceries