Composition Scheme

Meaning
• Alternative method of levy of GST
• For small tax payers
• Applicable for supplier of goods
• Applicable for restaurant service providers
• Applicable for mixed suppliers (Goods +
Services) (10% or 5 lakhs – higher*)
• Rate 6% (Conditions apply)
 Applicability
• Who can opt for this scheme?
– Taxpayer whose Aggregate turnover is not greater
than 1.5 crore (Rest of India)
– Taxpayer whose Aggregate turnover is not greater
than 75 lakhs (Uttarakhand And North East states
except Assam)
 Rate
Category Rate

Manufacturers 1% (CGST and SGST 0.5% each)

Restaurant Services 5% (CGST and SGST 2.5% each)

Any other 1% (CGST and SGST 0.5% each)

 Important Note
• A registered person who has opted for
Composition Scheme, cannot collect GST from
his customers. He will have to pay GST out of
his own pocket.
• Input Tax Credit not available.
• Inter State supply not allowed. If trader wants
to supply goods/service inter state then he has
to opt out of the scheme.
 Eligible Person
• A registered person
• Business of supply of goods or
• A manufacturer of goods except:
– Ice cream and other edible ice
– Pan masala
– Aerated water
– Tobacco
• Restaurant service provider (other than alcoholic
liquor)
 Determination of aggregate turnover
• Includes:
– All taxable supplies
– Exempt supplies
– Exports of goods/services
– Inter state supplies
• Excludes:
– Value of inward supplies on which tax is payable under
RCM
– Amount of GST
– Exempt supply of services – deposits, loans or advances
(consideration received in the form of interest)
Numerical
Time of payment