osimplify the procedure

compliance.
To pay least rate of GST at afixed amount of turnover.
Y. o encourage SME sectors.
To motivate Make in India project.
1. GST composition Scheme -Overview
" This scheme is for the Small Business who cannot maintain the
books of Accounts and Records.
detailed
Normally, an Assesse under GST is required to maintain the proper book.
of accounts for Output and Input, and is supposed to file 3 monthly returns
every month and 1Annual return which makes it too cumbersome. For
such Business, Government introduced an option to avail Composition
Scheme to make compliance easy.
" As per the Scheme, No ITC is available and the assessee shall pay output tax
at the lower rate.
" Also, instead of monthly returns, the assessee shall file Quarterly return and
an Annual return.
2. Eligible dealers who opt for GST Composition Scheme
Small Taxpayers with an Annual Turn over of up to Rs. 1.5 Crore can opt for
Composition Scheme
Composition scheme is open for manufacturers, restaurants and traders
whose turnover does not exceed Rs1.5 crore.
Those supplying goods and services (services not exceeding Rs.5 Lakhs in
total) can opt for composition scheme.
The composition scheme is levied for all the business verticals with the same
PAN.
3. Dealers not eligible to opt for the GST Composition Scheme
" Business with Turnover more than Rs. 1.5
Crore.
" Taxable Person who is engaged in
providing Services.
" Taxable person who makes Interstate outward
supply of goods
" Taxable person who makes any supply through
E-commerce operator
" Taxable person who makes any supply of goods which are
Tax likeAlcohol, Petrol, diesel etc not leviable to
Taxable person who isengaged in services businesses, manufacturers of pan
masala, ice-cream, tobacco and tobacco substitutes.
 cOMPOSITION SCHEME UNDER GST 155

4. Rateof GST Composition levy

Nature of Taxpayer CGST SGST Total
Manufacturers and Traders 0.5% 0.5% 1%
(Goods)
Restaurant (Not serving Alco 2.5% 2.5% 5%
hol)
5. Restrictions under the GST Composition Scheme
Composition Dealer shall not collect tax from recipient of service.
GST
Composition Dealer is not allowed to avail input tax credit (ITC) of
on purchases.
supplies: but, he
Composition Dealer shall not make Inter-State outward
can make Inward Inter-State Supplies. of
Composition Dealer cannot issue a Tax invoice, instead has to issue Bill
Supply.
the taxable person switches over
6. Reversal of Input Tax credit if
Composition scheme
from Regular scheme toGST Tax Credit, switches over
availed (ITC) Input
" Where any person, who has debit in the
composition scheme, he shall pay an amount, by way of
to equivalent to ITC in respect of the
Electronic ledger or the cash ledger, the date of such switch over
preceding
goods on the day immediately
" Inputs held in
stock
semi-finished or finished goods held in stock, and
Inputs contained in points as may be prescribed
reduced by such percentage
" Capital goods, as payment ofsuch amount, ifany lying in the
credit after
The balance of inputtax
credit ledger shall lapse. where a taxable person, who
Input Tax credit
7. Eligibilityofthe under the GST composition scheme, starts
was paying tax regularScheme.
paying tax under the take credit of Input tax in respect of
the
" Such person will
be entitled to
immediately preceding the day from which
day
following goods held on the
tax under regular
scheme
pay
hebecomes liable to
stock, and
" Inputs held in stocksemi-finished or finished goods held in
containedin may be prescribed
" Inputs percentage points as
goods, as reduced by such respect ofsupply of goods/servicesto
Capital be available in tax invoice relating
however not of issue of
TTCshall, expiryof 1year from the date
him afterthe the prescribed manner.
thereto calculated in
 late
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