{"id":457,"date":"2019-11-26T05:34:49","date_gmt":"2019-11-26T05:34:49","guid":{"rendered":"http:\/\/medicinsoftware.com\/blog\/?p=457"},"modified":"2020-12-02T05:29:01","modified_gmt":"2020-12-02T05:29:01","slug":"gst-composition-scheme","status":"publish","type":"post","link":"http:\/\/medicinsoftware.com\/blog\/gst-composition-scheme\/","title":{"rendered":"GST &#038; COMPOSITION SCHEME"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"457\" class=\"elementor elementor-457\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3332be64 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3332be64\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-667e26c3\" data-id=\"667e26c3\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-28e9b9eb elementor-widget elementor-widget-text-editor\" data-id=\"28e9b9eb\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\n<h1 style=\"color: #63bc8e;\">GST &#038; COMPOSITION SCHEME:<\/h1>\n<p>Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.0 crore*.<\/p>\n\n\n\n<p><strong>*CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.<\/strong><\/p>\n\n\n\n<p>Let us understand this scheme in detail-<br \/><br \/><\/p>\n\n\n\n<p><strong>1. Who can opt for Composition Scheme<\/strong><\/p>\n\n\n\n<p>A taxpayer whose turnover is below Rs\u00a01.0 crore* can opt for Composition Scheme.\u00a0In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh.<\/p>\n\n\n\n<p>As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019. Further, GST Council in its 32nd meeting proposed an\u00a0increase to this limit for service providers on 10th Jan 2019*.<\/p>\n\n\n\n<p>Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.<\/p>\n\n\n\n<p><strong>*CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.<\/strong><\/p>\n\n\n\n<p>*Update as on 10th Jan 2019<\/p>\n\n\n\n<p>As per 32nd GST Council Meeting held on 10th Jan 2019, Service Providers\u00a0can opt into the Composition Tax Scheme, and the Government has set the threshold turnover for service providers at Rs. 50 lakhs to be eligible for this scheme.<\/p>\n\n\n\n<p>2. Who cannot opt for Composition Scheme<\/p>\n\n\n\n<p>The following people cannot opt for the scheme-<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Manufacturer of ice cream, pan masala, or tobacco<\/li>\n<li>A person making inter-state supplies<\/li>\n<li>A casual taxable person or a non-resident taxable person<\/li>\n<li>Businesses which supply goods through an e-commerce operator<\/li>\n<\/ul>\n\n\n\n<p>3. What are the conditions for availing Composition Scheme?<\/p>\n\n\n\n<p>The following <a href=\"https:\/\/cleartax.in\/s\/composition-scheme-rules-gst\" target=\"_blank\" rel=\"noopener\">conditions<\/a> must be satisfied in order to opt for composition scheme:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No Input Tax Credit can be claimed by a dealer opting for composition scheme<\/li>\n<li>The dealer cannot supply GST exempted goods<\/li>\n<li>The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism<\/li>\n<li>If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.<\/li>\n<li>The taxpayer has to mention the words \u2018composition taxable person\u2019 on every notice or signboard displayed prominently at their place of business.<\/li>\n<li>The taxpayer has to mention the words \u2018composition taxable person\u2019 on every bill of supply issued by him.<\/li>\n<li>As per the CGST (Amendment) Act, 2018, a manufacturer or trader can now also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019.<\/li>\n<\/ul>\n\n\n\n<p>4. How can a taxpayer opt for composition scheme?<\/p>\n\n\n\n<p>To opt for composition scheme a taxpayer has to file <a href=\"https:\/\/cleartax.in\/s\/gst-cmp-02-filing\" target=\"_blank\" rel=\"noopener\">GST CMP-02<\/a> with the government. This can be done online by logging into the <a href=\"https:\/\/cleartax.in\/s\/file-cmp-02-gst-portal\/\" target=\"_blank\" rel=\"noopener\">GST Portal<\/a>.<\/p>\n\n\n\n<p>This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for Composition Scheme.<\/p>\n\n\n\n<p>5. How Should a Composition Dealer raise bill?<\/p>\n\n\n\n<p>A composition dealer cannot issue a tax invoice. This is because a composition dealer cannot charge tax from their customers. They need to pay tax out of their own pocket.<\/p>\n\n\n\n<p>Hence, the dealer has to issue a <a href=\"https:\/\/cleartax.in\/s\/gst-bill-of-supply\" target=\"_blank\" rel=\"noopener\">Bill of Supply<\/a>.<\/p>\n\n\n\n<p>The dealer should also mention \u201ccomposition taxable person, not eligible to collect tax on supplies\u201d \u00a0at the top of the <a href=\"https:\/\/cleartax.in\/s\/gst-bill-of-supply\" target=\"_blank\" rel=\"noopener\">Bill of Supply<\/a>.<\/p>\n\n\n\n<p>6. What are the GST rates for a composition dealer?<\/p>\n\n\n\n<p>Following chart explains the rate of tax on turnover applicable for composition dealers :<\/p>\n\n\n\n<p><strong>As per notification dated 01.01.2018, turnover in case of traders has been defined as \u2018 Turnover of taxable supplies of goods\u2019.<\/strong><\/p>\n\n\n\n<p><strong>7. How should GST payment be made by a composition dealer?<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/cleartax.in\/s\/gst-payments-and-refunds#payment\" target=\"_blank\" rel=\"noopener\">GST Payment<\/a> has to be made out of pocket for the supplies made.<\/p>\n\n\n\n<p>The <a href=\"https:\/\/cleartax.in\/s\/gst-payments-and-refunds#payment\" target=\"_blank\" rel=\"noopener\">GST payment<\/a> to be made by a composition dealer comprises of the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>GST on supplies made.<\/li>\n<li>Tax on reverse charge<\/li>\n<li>Tax on purchase from an unregistered dealer*<\/li>\n<\/ul>\n\n\n\n<p>*Only on the specified categories of goods and services and well as the notified class of registered persons with effect from 1st Feb 2019 but is yet to be notified. Hence, not applicable until then.<\/p>\n\n\n\n<p><strong>8. What are the returns to be filed by a composition dealer?<\/strong><\/p>\n\n\n\n<p>A dealer is required to file a quarterly return <a href=\"https:\/\/cleartax.in\/s\/gstr4-composition-dealer-gst-return\" target=\"_blank\" rel=\"noopener\">GSTR-4<\/a> by 18th of the month after the end of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next financial year*<\/p>\n\n\n\n<p>&nbsp;<\/p>\n\n\n\n<p class=\"GST ready pharmacy software GST ready pharmacy software in Mumbai\">VISIT FOR BEST GST READY ACCOUNTING AND INVENTORY AND BILLING SOFTWARE <a href=\"http:\/\/medicinsoftware.com\/\" target=\"_blank\" rel=\"noopener\">WWW.MEDICINSOFTWARE.COM<\/a><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>GST &amp; COMPOSITION SCHEME: Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This &hellip; <a href=\"http:\/\/medicinsoftware.com\/blog\/gst-composition-scheme\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">GST &#038; COMPOSITION SCHEME<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,28,27,25],"tags":[81,79,78,80,77,82,83],"class_list":["post-457","post","type-post","status-publish","format-standard","hentry","category-advantages","category-benefits","category-faqs","category-features","tag-3b-ready-software","tag-accounting-software","tag-best-gst-software","tag-billing-software","tag-gst-software","tag-gstr-1","tag-gstr-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GST &amp; Composition Scheme - Medicin Software<\/title>\n<meta name=\"description\" content=\"GST &amp; 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