FAQs on Composition scheme
A. How to get registered in the Composition Scheme?
- The application for opting-in composition scheme for the financial year 2020-21 is on the GST Portal. You can apply for the scheme by submitting the application form.
- The taxpayer has to opt-in a composition scheme for only one time. For example : The taxpayers who are already in a composition scheme in the previous financial year are not required to fill the application again.
- Those taxpayers, who want to opt-in for a composition scheme for the Financial Year 2020-2021, have to file FORM GST CMP-02 application up to 31st March, 2020 on the common portal..
- The taxpayers should guide as follows:
- Log-in>Services > Registration > Application to opt for Composition Levy>filing form GST CMP-02>file application under DSC/EVC.
- After filling application of CMP-02 , the composition scheme shall be available to the taxpayer w.e.f. 1st April 2020.
- Those taxpayers who want to switch into a composition scheme for 2020-21 and was registered as normal taxpayer in the previous financial year should file ITC-03 for reversal of ITC credit on stocks of Inputs, semi-finished goods and finished goods available with him within a period as prescribed under Rule 3(3A) of CGST Rules, 2017.
- For more information taxpayers may consult the client manual accessible at GST Portal.
All taxpayers opting in for composition shall file FORM GST CMP-08 quarterly and pay GST and will record GSTR-4 yearly.
C. Who are eligible taxpayers for Composition Scheme:-
A taxpayer whose aggregate turnover is below Rs 1.5 crore can opt for the Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is below Rs 75 lakh. As per the CGST (Amendment) Act, 2018, a composition dealer can also provide services to an amount of ten percent of turnover, or Rs.5 lakhs, whichever is higher. from the 1st of Feb, 2019 This amendment will be applicable. Further, GST Council in its 32nd summit proposed an increase to this limit for service providers on 10th Jan 2019. Turnover of all businesses registered with the same PAN should be taken into examination to calculate turnover.
D. Taxpayers, who are not eligible for composition scheme:
- The normal taxpayers with aggregate turnover (at PAN level) below Rs. 1.5 Crore in the previous financial year, who doesn’t want to avail ITC facility,
- Those normal taxpayers, who has an aggregate turnover (at PAN level) of below Rs. 75 lakh in the previous financial year who has the principle place of business in following states:
- Arunachal Pradesh,
- Tripura and
- Those taxpayers who are supplying services and/or mixed supplies, having aggregate turnover of last financial year below Rs. 50 lakhs.
- providers of the goods/services who aren't vulnerable to be taxed below GST
- Inter-State outward providers of goods/services,
- The taxpayers supplying through e-commerce operators, who are required to collect tax below section 52,
- The manufacturers of notified goods like (i) Ice cream and different suitable for eating ice, whether or no longer containing cocoa, (ii) All goods, i.e. Tobacco and manufactured tobacco substitutes and (iii) Pan Masala, (iv) Aerated water
- A random taxpayer,
- A transient Foreign Taxpayer,
- A person registered as Input Service Distributor (ISD),
A person registered as TDS Deductor /Tax Collector,
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