COMPOSITION TAX

OR SCHEME
 INTRODUCTION

It is a simpler method of paying taxes.

Main objective is to provide relief to the small TRADER

AND/OR MANUFACTURERS from maintaining detailed accounts
and Records.

Compliance with LAW is less as compared to Normal Provision as

there are 5 Returns Per annum instead of 37 Returns

Limited tax liability

 ELIGIBILITY
The Person must be Registered person.

Dealing only in goods, not applicable to services

except restaurant services.

All Registered Person under the Same PAN

should avail this scheme

Aggregate Turnover in Preceding Financial year

should not exceed the Rs 50 or 75 lacks
In its meeting held on 18th June, 2017, the GST Council has recommended that the
turnover limit for Composition Levy for CGST and SGST purposes shall be Rs.50 lacks in
respect of the following Special Category States namely:

Arunachal Pradesh, Sikkim , Tripura

Assam , Meghalaya Himachal Pradesh

Manipur , Mizoram,

3. The Council has also recommended that in case of Uttarakhand, the turnover limit for
Composition Levy for CGST and SGST purposes will be Rs.75 lacks.

4. For the State of Jammu & Kashmir the turnover limit for the Composition levywill be
decided in due course.
 RESTRICTIONS
This scheme shall not applicable to:

Supply of Services except Restaurant.

Supply of goods not chargeable to tax

Interstate outward supplies of goods.

Supply of goods through electronic commerce operator who is Required to collect tax at
source

Manufacturer of notified goods

If during F.Y the Aggregate turnover exceeds Rs 50 lacks, no composition from the following
day.

Tax and penalty applicable if scheme is wrongly availed

He is neither a casual taxable person or non- resident taxable
person

Inward supply of goods received from unregistered person held

by him on preceding date from which he opts for the same

Goods on the appointed day shall not be purchase from

Unregistered person , in interstate course, imported, Received
from his Branch or from his agent or Principal outside the state.

He shall mention the words “composition taxable person”, at

every prominent places & not eligible to collect the tax.
Need to File the Return Quarterly & Annually.

Taxes shall be paid quarterly

Shall file intimation within 30 days of appointed day & shall

issue the Bill of supply instead Taxable Invoice after the
aforesaid date then effective date will be appointed day

Within 60 days from commencement of Relevant F.Y person

has to filed a FORM GST ITC-3 Statement then effective date
will be beginning of F.Y
 AGGREGATE TURNOVER
Means the aggregate value of supply & shall include :

All Taxable supplies

All exempt supplies

All export of Goods/services

But shall not include:

Taxes under the CGST,SGST,IGST and value of inward supplies

And Taxes paid under the Reverse charge u/s 9 (3).

Of a person having the same PAN and shall be computed on all India basis.
 FEATURES

This scheme is optional

To avail this scheme Tax payer should inform the government within Prescribed Time

Taxes to be paid of the %age of the Turnover

Restaurant- 5%

Manufacturer- 2%

Other supplies- 1%

No Restriction on Interstate Inward supply

Tax would not be charged/collected from Customer

Input tax would not be admissible

 COMPLIANCE TO LAW
INVOICE:- Shall issue a bill of supply containing
such particulars as may be prescribed

Tax payment should be quarterly

Quarterly Return within 18 days from the end of

Relevant quarter

Annual Return on 31st December following the

Financial Year.
 Taxes and Penalty
If person has wrongly availed the benefit of this
scheme

Tax liability generates as per normal provisions

Penalty equal to tax liability

Show cause notice to be given to dealer.

Thank

You