COMPOSITION LEVY SCHEME (SECTION 10)

Introduction
Scheme for small taxpayers- simple and easy , save from many
complicated compliances/procedures.
Voluntary and optional.
Applicability-Applicable for goods initially but services also
included from 1.4.2019
 Threshold limit (goods)-A taxpayer whose annual turnover is
below Rs 1.5 crore can opt for Composition Scheme. In case of
North-Eastern states and Himachal Pradesh, the limit is Rs 75 lakh.
Threshold limit (services)-A composition dealer can also supply
services to an extent of 10% of turnover, or Rs.5 lakhs, whichever is
higher.(w.e.f. 1.2.2019).Alternatively for suppliers of services or
mixed suppliers whose annual turnover is up to Rs 50 lakhs.

Scheme not available for following taxable persons:-

Manufacturer of ice cream, pan masala, or tobacco
A person making inter-state supplies
A casual taxable person or a non-resident taxable person
Businesses which supply goods through an e-commerce operator
A person making supplies of goods or services not taxable under
GST
Main Provisions of Composition Scheme:-
No Input Tax Credit is allowed to composite dealer
Tax at normal rates for transactions under the Reverse Charge
Mechanism.
The words ‘composition taxable person’ on every notice or
signboard and on every bill of supply issued by him.
Quarterly payment of tax- by 18th of the month after end of quarter
Filing of return -Quarterly in form GSTR-04 by 18th of month next
to quarter, Annual in GSTR-9A by 31st December of the next financial
year.
GST rates for the composition Levy:-

Type of Taxable person CGST SGST TOTAL

Manufacturer other than manufacturers 1% 1% 2%

of notified goods
Supplier of food & drinks (restaurant 2.5% 2.5% 5%
business referred to in clause(b) of
paragraph 6 of Schedule II)
Any other suppliers(Traders) 0.5% 0.5% 1%

Service Providers eligible u/s 10(2A) on 3% 3% 6%

presumptive basis

These Rates are applicable from 01 April 2019 to till date