GST Composition Scheme

GST Composition Scheme for B.com final year students by Dr. Anita Pandey

1. INTRODUCTION TO COMPOSITION SCHEME FOR B.COM FINAL YEAR PREPARED BY:- Dr. Anita Pandey HOD, Commerce Department SHRI SHANKARACHARYA MAHAVIDYALAYA

2. INTRODUCTION GST COMPOSITION SCHEME:- It is a simple scheme under GST regime for tax payers. Small tax payers can get rid of tedious GST formalities and pay GST at a fixed rate of turn over. This scheme can be opted by any tax payer whose turnover is less than Rs.1.5 crore.

3. NEW UPDATES As per 32 nd GST council meeting held on 10 th January 2019, service providers can also opt for the composition tax scheme. The government has set the threshold limit for service providers at Rs. 50 lakhs to be eligible for this scheme.

4. PERSONS ELIGIBLE TO OPT COMPOSITION SCHEME Turnover of all business registered under GST act. Total turnover of the business should not be more than Rs.1.5 crore. Revenue from both taxable goods and exempted goods are included considered in calculation of aggregate turnover. Total turnover from all businesses having same PAN is considered in calculation of aggregate turnover, even if the businesses are registered with different GSTIN.

5. PERSONS NOT ELIGIBLE TO OPT COMPOSITION SCHEME Manufacturer of Ice-cream, Pan Masala or Tobacco. A person making inter state supply. A casual taxable person or a non resident taxable person. Business which supply goods through an E-commerce operators. Dealers of petrol and diesel are also not eligible.

6. CONDITIONS FOR AVAILING COMPOSITION SCHEME No input tax credit can be claimed by a dealer opting for composition scheme. The tax payer has to pay tax at normal rates for transactions under the reverse charge mechanism. If a taxable person has different segments of business such as textiles, electronic accessories, groceries etc. under the same PAN, they must register all such business under the scheme collectively. The tax payer has to mention the word composition taxable person on every notice or sign board at their place of business and on every bill of supply issued by him.

7. ADVANTAGES OF COMPOSITION SCHEME Lesser compliance (returns, maintaining books of record and issuance of invoices.) Limited tax liability High liquidity as taxes are at a lower rate.

8. DISADVANTAGES OF COMPOSITION SCHEME A limited territory of business No input tax credit available to composition dealers The tax payer will not be eligible to supply goods through an E-commerce portal.

9. “STUDENTS STAY HOME AND BE SAFE…” REFERENCES Cleartax.in/s/gst.composition Professor Shripal Saklecha ( GOODS AND SERVICE TAX)