Composition Scheme under GST

 

Composition Scheme under GST

With the threshold for registration under GST being as low as INR 20 lakh, a large number of small and medium size businesses would now come under the new tax regime. Considering these Organisations may not have the infrastructure and resources to comply with the regular provisions, a Composition Scheme under GST has been introduced.

Let us take a look at the applicability, eligibility criteria, conditions, and other provisions of this scheme.

Who can opt for the Composition Scheme?

  1. Manufacturer
  2. Food and Restaurant Services
  3. Traders

The decision to opt for the Composition Scheme should be made at the beginning of the Financial Year for a person already registered under the GST Law or at the time of applying for registration or within 30 days from the 1st of July, 2017 in case of person migrating from the existing provision.

What is the eligibility criteria to opt for the Composition Scheme?

A person in any of the above categories, whose aggregate turnover did not exceed INR 75 lakhs* in the previous financial year is eligible to opt for this scheme.

Aggregate Turnover = Value of Outward Supplies + Zero Rated Outward Supplies + Exempt Outward Supplies

Aggregate Turnover covers all the supplies effected by a person having the same PAN.

* The threshold limit for opting Composition Scheme in Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim and Himachal Pradesh is INR 50 lakhs.

What are the rates of taxes under the Composition Scheme?

Category of Persons Rates of Tax
Manufacturer 2%
Food and Restaurant Services 5%
Traders 1%

Tax is payable on the Turnover of the Person in a State or Union Territory.

Turnover in a State or Union Territory = (Value of Outward Supplies + Zero Rated Outward Supplies + Exempt Outward Supplies)

Illustration

Is the supply of bakery products eligible for Composition Scheme under the Food and Restaurant Services category?

The supply of food and restaurant services category is the only service included under the composition scheme. For a business to be categorised as food and restaurant services, there needs to be an element of service involved. In the case of supply of bakery products, there is only a supply of goods i.e. food items but there is no element of supply of service. Hence supply of bakery products is eligible for composition scheme under the Traders category and not Food and Restaurant Services category.

 

What are the conditions to be complied with, to opt for the Composition Scheme?

The person should not be:

  1. engaged in the supply of services other than the food and restaurant services
  2. engaged in the supply of alcohol liquor for human consumption
  3. engaged in the manufacture of ice-cream, pan masala or other tobacco products and tobacco substitutes
  4. engaged in inter-state outward supply of goods
  5. engaged in making a supply of goods through an ecommerce operator unless the portal is owned by the said person
  6. a casual person or a non-resident person
  7. in possession of stock purchased through interstate trade or transfers or imports on the appointed day
  8. in possession of stock purchased from an unregistered dealer and if he is in possession of such stock, tax under reverse charge mechanism has been paid

What are the other provisions that one needs to keep in mind while opting for the Composition Scheme?

  1. Composition scheme, once opted will apply to all the business verticals of the said person i.e. the option of the scheme will be awarded to all the businesses owned by a person under a single PAN.

 Illustration

Combination of businesses owned by a person under a single PAN Applicability of Composition Scheme
Restaurant, mobile dealership and textile manufacturing unit Yes
Restaurant, supply of mobile through an ecommerce operator No

2. The person shall not collect tax from his customers on the outward supply made by him

3. The person shall not utilise the input tax credit on his inward supplies to pay his output tax liability.

4. The person shall continue to pay taxes at the regular rates for inward supplies under the reverse charge mechanism

How is Input Credit treated at the time of opting for Composition Scheme?

On opting for the Composition Scheme, if the said person has any input credit available, then he shall reverse the amount equal to the input credit on the stock held by him on the immediately preceding day of exercising the option. The stock can be inputs, semi-finished goods, finished goods or capital goods. The remaining value of input credit, if any shall lapse.

In case of a person migrating from the current laws to the Composition Scheme under GST, then again all the input to his credit under the current laws shall lapse.

Can a person who has opted to pay tax under Composition Scheme avail input credit on the inward supply of goods and services?

A person who has opted to pay tax under the Composition Scheme cannot claim input credit on the inward supply of goods and services. The input taxes paid on inward supply of goods and services shall be an additional cost to such person.

What type of an invoice should a person opting for the composition scheme issue on outward supplies made by him?

A person opting for composition scheme shall not issue a tax invoice. He should issue a Bill of Supply and clearly mention “Composition Taxable Person, Not Eligible to Collect Tax on Supplies” on top of the invoice issued by him.

The Bill of Supply must have the following details:

  1. name, address and GSTIN of the supplier,
  2. a consecutive serial number containing only alphabets and/or numerals, unique for a financial year,
  3. date of its issue,
  4. name, address and GSTIN/ Unique ID Number, if registered, of the recipient,
  5. HSN Code of goods or accounting code for services,
  6. description of goods or services,
  7. value of goods or services taking into account discount or abatement, if any, and
  8. signature or digital signature of the supplier or his authorized representative.

It is important to note that, since a person opting for Composition Scheme cannot issue a tax invoice, he breaks the benefit of transfer of input credit down to the end of the value chain.

What are the returns required to be filed under the Composition Scheme?

Form Name Particulars Periodicity Due Date Penalty Provisions
GSTR 4 Details of Outward supplies, debit notes issued, credit notes received, import of goods or services made, invoice wise inter-state and intra-state inward supplies from registered and un-registered dealers. This return should be filed after adding, correcting or changing details, if required in Form GSTR 4A. Quarterly 18th of the Month following the Quarter Any delay in filing of the returns attracts a liability of INR 100 per day subject to a maximum of INR 5,000
GSTR 4A The details of all outward supplies made by a supplier under a regular scheme has to be furnished in Form GSTR1. If a Composition Dealer has availed any goods or services from other Registered Persons, then he will be able to view the details of his input goods or services in Form GSTR 4A. Monthly Between 11th and 15th of every month
GSTR 9A Annual Return Annual 31st of December following the end of the Financial Year for which the Annual Return is being filed Any delay in filing of the returns attracts a liability of INR 100 per day subject to a maximum of an amount calculated at 0.25% on the Turnover in that State or UT

 What are the accounts and records that need to be maintained by a Composition Dealer?

  1. Record of monthly production accounts, showing quantitative details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products
  2. Opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and balance of stock including raw material, finished goods, scrap and wastage thereof
  3. Names and complete addresses of premises where he stores stocks including stocks in transit and stocks stored there in
  4. Names and complete addresses of suppliers to whom he supplies goods or services chargeable to tax
  5. Separate account of advances received, paid and adjustments made thereto
  6. Register of Bill of Supply issued

Click here to try a GST Accounting and Returns Filing tool for free.

What happens if the person under Composition Scheme exceeds the threshold limit of INR 75 lakhs during the Financial Year?

The person shall be immediately liable to pay tax as per the normal rates specified by the GST Law and thereby all the regular provisions of the law will become applicable to him. He will be able to claim input credit on the stock held by him on the immediately preceding day of exercising the option. The stock can be inputs, semi-finished goods, finished goods or capital goods. The date of invoice of the input supplies should not be earlier 1 year from the date preceding the date on which the regular provisions of the law become applicable to him.

Decision making: Composition Scheme vs Regular Tax Levy

We need to understand that the GST Law replaces all the other Indirect Tax statutes in the Country, thereby allowing each supplier to pass on the credit of input tax down the supply chain. This reduces the effect of additional tax burden at each stage from manufacture to trader to the customer and encourages tax levy only on the value addition at each stage.

The thumb rule we could use at the time of making this decision is not to apply for a Composition Scheme if the person is in the middle of the value chain i.e. all the B2B businesses. We could look at opting for the Composition Levy in the case of B2C businesses so far as the benefit of paying tax under the Composition Scheme far outweighs the cost of compliance under the regular scheme and other factors relevant to the business in question.

Illustration 1

Let us take the example of Coir Mats to understand the benefits of remaining under the normal provisions versus composition scheme for the trader under composition levy.

 

Under Composition Scheme   Under the Normal Provisions
Particulars Amount

(INR)

  Particulars

Amount

(INR)

Manufacturer to Trader Manufacturer to Trader
Sale Price 100.0 Sale Price 100.0
GST* @ 5% 5.0 GST* @ 5% 5.0
Total Invoice Value 105.0   Total Invoice Value 105.0
Trader to End User Trader to End User
Cost 105.0 Cost 100.0
Mark up @ 10% 10.5 Mark up @ 10% 10.0
Sale Price 115.5 Sale Price 110.0
Total Invoice Value 115.5 GST* @ 5% 5.5
Tax under Composition Levy @ 1% 1.2 Total Invoice Value 115.5

In this illustration we can see that, a trader, who is in the middle of the value chain is better of remaining under the normal provisions, where his net tax liability is only INR 0.5 (i.e Output Tax of INR 5.5 – Input Tax of INR 5.0). Whereas under the composition scheme his net outflow on taxes would be INR 0.7 (i.e Output Tax of INR 1.2 – Additional profit of INR 0.5).

Now to this let us add the cost of compliance under both the schemes, being INR 1 under normal provisions and INR 0.5 under composition scheme.

Total outflow under the normal provisions is INR 1.5 and under compositions scheme is INR 1.2, making it more beneficial to opt for the composition scheme.

Illustration 2

Let us take the example of Coir Mats again to understand the benefits of remaining under the normal provisions versus composition scheme for the trader under composition levy if the manufacturer is also under the composition scheme.

 

Under Composition Scheme   Under the Normal Provisions
Particulars Amount

(INR)

  Particulars

Amount

(INR)

Manufacturer to Trader Manufacturer to Trader
Sale Price 100.0 Sale Price 100.0
Total Invoice Value 100.0 GST* @ 5% 5.0
Tax under Composition Levy @ 2% 2.0   Total Invoice Value 105.0
Trader to End User Trader to End User
Cost 100.0 Cost 100.0
Mark up @ 10% 10.0 Mark up @ 10% 10.0
Sale Price 110.0 Sale Price 110.0
Total Invoice Value 110.0 GST *@ 5% 5.5
Tax under Composition Levy @ 1% 1.1 Total Invoice Value 115.5

In this illustration we can see that, a trader, who is in the middle of the value chain is better off remaining under the normal provisions, where his net tax liability is only INR 0.5 (i.e Output Tax of INR 5.5 – Input Tax of INR 5.0). Whereas under the composition scheme his net outflow on taxes would be INR 1.1.

Now to this let us add the cost of compliance under both the schemes, being INR 1 under normal provisions and INR 0.5 under composition scheme.

Total outflow under the normal provisions is INR 1.5 and under compositions scheme is INR 1.6, making it more beneficial to still continue under the normal provisions.

Illustration 3

Let us take the example of a restaurant that is eligible to opt for the Composition Scheme based on our earlier discussion to understand the benefits of remaining under the normal provisions versus composition scheme.

In a restaurant business, we should be aware that there will be a certain amount of exempt/ nil rated inputs. Let us assume the value of these inputs to be 20% of the total inputs and the tax rate for the remaining inputs to be 18%.

 

Under Composition Scheme   Under the Normal Provisions
Particulars Amount

(INR)

  Particulars

Amount

(INR)

Total Value of Inputs 62.5 Total Value of Inputs 62.5
Tax on 80% of Inputs at 18% 9.0 Tax on 80% of Inputs at 18% 9.0
Total Cost 71.5 Total Cost 62.5
Mark up @ 40% 28.5   Mark Up at 40% 25.0
Sale Price 100.0 Sale Price 87.5
Composition Levy at 5% 5.0 GST* at 18% 15.8

In this illustration we can see that, the net benefit for a person under the composition scheme is INR 1.5 (i.e Output Tax of INR 5.0 – Incremental Gross Margin of INR 3.5). Whereas under the normal provisions his net outflow on taxes would be INR 6.8, making it more beneficial to opt for the Composition Scheme.

These illustrations are only indicative of how an impact analysis may be done to choose between compliance under the normal provisions and composition scheme. You may have to consider additional factors unique to each business and industry. For example in illustration 2, the final sale price of the product under the composition scheme is more competitive to the sale price under the normal provisions. If the majority of the industry (both manufacturers and traders) are under composition levy, then persons under normal provisions may take a hit on the sales volumes or if they discount the price, then a hit on the profit margins.

(*GST = CGST + SGST)

I am a Chartered Accountant with 5 years of experience in both Consulting (KPMG) and Industry (Tapzo).

I am currently assisting various Organizations in understanding the impact of GST on their businesses to help them with a smooth transition.

Key areas of experience include:
– GST
– Developing SOPs and Process Implementation
– Identifying and Implementing Internal Controls as required by the ICFR Framework
– Training and Development of staff in various Finance/ Audit functions
– Statutory Audits

71 Comments
  1. Bharat bhalla 2 weeks ago

    can we opt composition scheme if i have stock of iss purchase and willing to pay the tax according to current regime on stock ?

    • Author
      Bhavana Nagendra 2 weeks ago

      Hi Bharat,

      You will not be able to opt for Composition Scheme if you hold stock purchased in the course of inter state trade/ stock transfers or imports. The Act does not provide for a remedy in this situation.

      Regards,
      Bhavana Nagendra

      • Amrish 1 week ago

        But I have heard about reverse charge on inter state purchase stock need to pay reverse charge and go for composition scheme

        • Author
          Bhavana Nagendra 5 days ago

          Hi Amrish,

          That option is available only for unregistered dealer purchases.

          Regards,
          Bhavana Nagendra

  2. Seshu 2 weeks ago

    we have a bakery which is air-conditioned where we also have sitting availability. Now since we arranged sitting for the convenience of the customers will it fall under supply of services or traders. We sell products which fall under different slabs of GST. Kindly help us how we should charge our customers. Should we charge according to the Restaurant Services or charge customers based on the what they buy from us

    • Author
      Bhavana Nagendra 1 week ago

      Hi Seshu,

      Yours is clearly a restaurant and food supply service. If your turnover is less than INR 75 lakhs you can opt for composition scheme at 5% tax. If you choose to opt for the regular tax scheme, the tax rate would be 18% under restaurant and food supply service and not by the item sold.

      Regards,
      Bhavana Nagendra

  3. mahesh mehta 2 weeks ago

    My turnover in fy 2016 2017 is around 80lakh. But now my sale is dicreeased… its may be around 60 lakh in this f y. Because of this, may i iligible for composition scheme? Vat return for apr to june 17 filed by me is for 13 lakh only.

    • Author
      Bhavana Nagendra 2 weeks ago

      Hi Mahesh,

      You will not be able to opt for the Composition Scheme for the FY 2017 – 18. However, since your turnover for the said year will be less than INR 75 lakhs, you can opt for Composition Scheme from 1-Apr-18 by filing an intimation in form GST CMP 02 in February 2018 or March 2018.

      Regards,
      Bhavana Nagendra

  4. hitesh 2 weeks ago

    hi, i am stationery retailer I registered for vat just in june and my expected turnover is only 15 lacs no stock purchased till 30 june.. should i take composition scheme or regular… most of the items are 12% category

    • Author
      Bhavana Nagendra 1 week ago

      Hi Hitesh,

      Please could you tell me if you have any other source of income apart from the stationery retail store?

      Regards,
      Bhavana Nagendra

      • hitesh 1 week ago

        no other source of income except interest received from fdr about 25000 per year

  5. lalit 2 weeks ago

    hello, i am running photocopy and computer printing from same multifunction machines used for photocopy shop registered under tin/vat what are the gst tax rates for my business. photocopy prints comes under service or goods category. can i go for composition scheme

    • Author
      Bhavana Nagendra 1 week ago

      Hi Lalit,

      This would be a service taxed at 18%. You will not be able to opt for Composition Scheme.

      Regards,
      Bhavana Nagendra

      • lalit 1 week ago

        but paper is not supplied by customer.. i think it will cover in hsn 4911.. pls check n reply.. it will be under 12% gst goods category

    • Author
      Bhavana Nagendra 5 days ago

      Hi Lalit,

      This will be categorised as a service under GST and hence you will not be able to opt for Composition Scheme.

      Regards,
      Bhavana Nagendra

  6. Amit Vani 2 weeks ago

    Mam

    Which Type of industries is not coverd under that scheme??

    • Author
      Bhavana Nagendra 1 week ago

      Hi Amit,

      All industries under trading and manufacturing are covered. In case of services only restaurant and food supply is covered.

      Regards,
      Bhavana Nagendra

    • Author
      Bhavana Nagendra 5 days ago

      Hi Amit,

      All industries under trading and manufacturing are covered. However, only restaurant service is covered.

      Regards,
      Bhavana Nagendra

  7. SUNIL 1 week ago

    i am a regular dealer under vat. i want to switch over to composition under GST. AS PER MY LAST RETURN I DO NAT HAVE ANY VAT REFUND. dO I NEED TO REVERSE THE INPUT TAX ON STOCK HELD FOR SWITCHING OVER TO COMPOSITION OR I NEED NEED PAY ANY TAX AND SIMPLE FILE APPLICATION FOR COMPOSITION UNDER GST

    • Author
      Bhavana Nagendra 5 days ago

      Hi Sunil,

      You will just need to reverse the input tax on stock held at the time of opting for Composition Scheme.

      Regards,
      Bhavana Nagendra

  8. Tripti 1 week ago

    We are a manufacturing concern of kids wear garments. We get printing, embroidery and stitching done from job workers who are not registered. If the job workers opt for composition scheme, then we have to pay GST on reverse charge for getting job work done from them? Is that correct? Is it beneficial for us to get them registered?

    • Author
      Bhavana Nagendra 5 days ago

      Hi Tripti,

      If any purchases are made registered person under Composition Scheme, then you do not have to pay tax on the charges paid to them on reverse charge. Job workers cannot opt for Composition Scheme.
      If they are not registered, you need to add them as your place of business before moving any goods to them for getting work done. Also, you will have to pay tax on RCM for charges paid to them.

      Regards,
      Bhavana Nagendra

  9. Prashanth 1 week ago

    I run a photography Studio ans my turnover is less than 75 lakhs, can i opt for composition tax

    • Author
      Bhavana Nagendra 5 days ago

      Hi Prashanth,

      This is a service under GST and the only service allowed to opt for Composition Scheme under GST is Restaurant Services. Hence you will not be able to opt for Composition Scheme.

      Regards,
      Bhavana Nagendra

  10. robin 1 week ago

    Hi Bhavana,
    I am a govt nd army order supplier and in my business i just issue retail invoice at the point of sale. my current turnover is around 45 lakh yearly, all my sale generally are interstate…. my question is can i opt for GST composition scheme when all my sales are retail invoice sales to different govt department .

    • Author
      Bhavana Nagendra 5 days ago

      Hi Robin,

      Since you are engaged in inter state sales, you cannot opt for Composition Scheme.

      Regards,
      Bhavana Nagendra

  11. Jatinder 1 week ago

    We r running general store n turnover is around 55 lakhs.will composition scheme will be beneficial?We r dealing mostly taxeable items

    • Author
      Bhavana Nagendra 5 days ago

      Hi Jatinder,

      If your store has to sell goods at the fixed MRP, you can go in for Composition Scheme.

      Regards,
      Bhavana Nagendra

  12. Jitendra 1 week ago

    Hi mam
    We have bar n restaurant opened recently. We serve food n even liquir n our agrreegate turnover for the year will not cross above 75 lakhs. So we are eligible to opt for composit scheme of gst .

    • Author
      Bhavana Nagendra 5 days ago

      Hi Jitendra,

      You will not be eligible for Composition Scheme if you are serving liquor.

      Regards,
      Bhavana Nagendra

  13. Aditya Tibrewal 1 week ago

    Hi, we regularly offload our work on Job Work basis to local Job Work Companies.. Please give detailed information on Composition Scehme of GST on Job Work.. Like what is the Total Limit of Turnover that can be done by the Job Work Company under Composition Scehme.. Also what would be GST payable by him to Govt.. And can he charge us the GST on his Invoices submitted to us or he will have to bear by himself.. Thanks

    • Author
      Bhavana Nagendra 5 days ago

      Hi Aditya,

      A job work is classified as service under GST and the only service provider who can opt for Composition Scheme under GST is Restaurant and Food Supply. Hence a Job Worker cannot opt for Composition Scheme. Since he has to register under the normal provisions, he has to collect the GST from you on the invoices issued to you.

      Regards,
      Bhavana Nagendra

  14. Deepak 1 week ago

    Hi Bhavana Ji
    Please confirm tax rate for mithai Wala sweets in composition scheme 1℅ or 5%

    • Author
      Bhavana Nagendra 5 days ago

      Hi Deepak,

      If you are providing seating and/or delivery services, the 5%. If it is just sale of sweets over the counter 1%.

      Regards,
      Bhavana Nagendra

  15. Prashant Hiran 1 week ago

    I am having Mobile Recharge commission income only. Companies requires GST registration number. But my commission not more than 1 lakh per annuam. Can I get to required GST Number.What is the rate I have to charge to customer

    • Author
      Bhavana Nagendra 5 days ago

      Hi Prashant,

      Do you have any other source of income? If yes, once you register under GST, all your incomes will be liable to GST.

      You can get a GST registration number and file your returns through the nearest GST Facilitation Centre. You will have to charge GST on the commission you earn from the Companies. No GST on the customer.

      Regards,
      Bhavana Nagendra

  16. Anish Mahajan 1 week ago

    Can a composition dealer purchase goods from out side states

    • Author
      Bhavana Nagendra 5 days ago

      Hi Anish,

      The only restrictions are you should not make an interstate sale and you should not hold stock from interstate purchase on 1st July. So yes you can make inter state purchases under the Composition Scheme.

      Regards,
      Bhavana Nagendra

  17. Sanjay 1 week ago

    What about RWA’s with turnover more than 20 lacs in a year ?

    • Author
      Bhavana Nagendra 10 hours ago

      Hi Sanjay,

      Please do email me your contact details to discuss this further.

      Regards,
      Bhavana Nagendra

  18. ISMAIL 1 week ago

    We are in fabrication of grill and windows, As small scale industry.
    Let me know can I go for composition tax and what the laws applicable?
    Thanks

    • Author
      Bhavana Nagendra 5 days ago

      Hi Ismail,

      It is a service and hence you will be liable to GST under the regular scheme.

      Regards,
      Bhavana Nagendra

  19. Zoher Kheriwala 6 days ago

    Hi, I am a textile dealer and manufecturer of readymade garmments. My business is B to C. I have taken composition scheme, Can i sell goods to end customer who comes from other other state or country? Some times it happends that goods are not available but customer makes entire payment and takes bill of supply from me with the commitment of goods will be couriered to them. can i courier goods to end customer interstate pls reply.

    • Author
      Bhavana Nagendra 5 days ago

      Hi Zoher,

      What you have mentioned is inter state sale. One of the restrictions of Composition Scheme is not to be engaged in interstate supply. Request you to reconsider your option for Composition Scheme or re-structure your transactions to comply with it.

      Regards,
      Bhavana Nagendra

      • amit 5 days ago

        I am a manufacturer of cold drink and my turnover is 40 lakh .Can I opt composite scheme.

        • Author
          Bhavana Nagendra 2 days ago

          Hi Amit,

          Yes you can. Please ensure all the other conditions are satisfied as well.

          Regards,
          Bhavana Nagendra

  20. Archit Nevatia 5 days ago

    What will be applicablity of composition scheme on second hand car dealers if they are involved in only intra State trading . Wht wi be aggregate turnover his margin or total sales value?

    • Author
      Bhavana Nagendra 2 days ago

      Hi Archit,

      Please send me your contact details so we can schedule a call and discuss your business model so I am better placed to help you with this question.

      Regards,
      Bhavana Nagendra

  21. Prakash 4 days ago

    i am doing business of provison store and my total turnover is 40 lakhs out of which 25 lakhs are taxable and 15 lakhs are tax free .. so if i select composition scheme then i have to pay tax on 25 lakhs or 40 lakhs.

    • Author
      Bhavana Nagendra 2 days ago

      Hi Prakash,

      Tax will be payable on INR 40 lakhs.

      Regards,
      Bhavana Nagendra

  22. harish kumar Gupta 4 days ago

    Hi I want to know GST tax applicable to input or output or total turnover can you help me

    • Author
      Bhavana Nagendra 2 days ago

      Hi Harish,

      Sure I can. Please send me your contact details so we can schedule a call to discuss the details.

      Regards,
      Bhavana Nagendra

  23. Jogmoy Dey 4 days ago

    Hi I am grocery and Mobile recharge retailer. may i iligible for composition scheme? I want to know mobile recharge come under service or goods.

    • Author
      Bhavana Nagendra 2 days ago

      Hi Jogmoy,

      Mobile recharge is a service and hence you will not be able to opt for composition scheme. If you have only a grocery store under your registration/ PAN then you may opt for the Composition Scheme.

      Regards,
      Bhavana Nagendra

  24. Ms. Desai 3 days ago

    Hi Bhavna Mam, We are registered under GST and are in service field. If we purchase goods from supplier who is under composition scheme, what would be tax implication on us? Need we take any declaration from the supplier about he availing composition scheme? Regards.

    • Author
      Bhavana Nagendra 2 days ago

      Hi Mr. Desai,

      There is no tax impact on you. The invoice of the Composition Dealer must state that he is selling goods under the Composition Scheme. You do not need any other document apart from this.

      Regards,
      Bhavana Nagendra

  25. Venkat 3 days ago

    We run printing press and rubber stamp shop which comes below 50lacks turnover. Our business is only with Tamilnadu state. Our job structure is, buying paper from paper shops and getting printing works from other printing press (not by us), and sold as printed binded letter heads, printed covers and multicolour brouchers to our clients. And Rubber Stamps, we made by us using our machines.

    Whether can we opt in composition scheme?

    • Author
      Bhavana Nagendra 2 days ago

      Hi Venkat,

      Sure you can. Please ensure all other conditions under the scheme are comlied with.

      Regards,
      Bhavana Nagendra

  26. pragnesh patel 3 days ago

    I am trader and have business of ready made tobacco products wholesaler…can i opt for composition scheme?? You have told that any traders can avail this scheme,Is there any rule that traders of some products can not avail composition scheme like ready made tobacco products??

    • Author
      Bhavana Nagendra 2 days ago

      Hi Pragnesh,

      GST is not applicable for the following:
      a. Manufacturers ice-cream, pan masala or other tobacco products and tobacco substitutes
      b. All service providers except restaurant and food supply.

      Anyone except the above can opt for Composition Scheme.

      Regards,
      Bhavana Nagendra

      • pragnesh patel 1 day ago

        Thank you mam for your valuable reply..I just want to know that my sale is only my state not intrastate selling but can i make purchase intrastate in composition scheme??

  27. GourishankerPatil 3 days ago

    Mam iam owning a bakery where I purchase raw materials and manufacture bakery foods like bread,buns,khari,rusks,cakes,puffs,sandwich, burgers n sweets,etc..In the same time I even purchase biscuits, chocolates, chips,cold drinks,icecreams n some snacks. .. Please suggest me where n under what GST scheme I have to register, Whether under composition or regular. .where my transaction is somewhere around 200000 lakh to 2500000 lakh per annum. .

    • Author
      Bhavana Nagendra 2 days ago

      Hi Gourishanker,

      You can opt for composition scheme provided you comply with all the conditions necessary under Composition Scheme.

      Regards,
      Bhavana Nagendra

  28. Ninad Gawli 3 days ago

    Hi, bhavna madam
    I am having restaurant which has partly air condition facility but my turnover is less than 75 lakhs can I opt for composition scheme please reply

    • Author
      Bhavana Nagendra 2 days ago

      Hi Ninad,

      Sure you can. Please ensure the other conditions are met.

      Regards,
      Bhavana Nagendra

  29. Ram 3 days ago

    If there is unregistered purchases still RCM applicable for dealer under composition scheme

    • Author
      Bhavana Nagendra 2 days ago

      Yes Ram.

      Regards,
      Bhavana Nagendra

  30. Dimple Thakkar 2 days ago

    if there is dealer of bakery product who produce the bakery product as well as sell the Bakery product then which rate is application for composition scheme i.e. for manufacturing 2% or Trading 1%

    • Author
      Bhavana Nagendra 10 hours ago

      Hi Dimple,

      Effectively you are making money out of the trading activity, hence 1%.

      Regards,
      Bhavana Nagendra

  31. rajagopal kanaka 21 hours ago

    dear madam,

    We have registered under GST , if we made purchase any items from a person who opted composition scheme whether we have to pay tax on reverse or not. The person ( composition shceme dealer ) is not charging any tax , but the registered person has to pay tax on reverse or need not to pay any taxes. if yes , kindly let me know the tax rates.

    Thanking you,

    • Author
      Bhavana Nagendra 10 hours ago

      Hi Rajagopal,

      You do not have to ay tax on reverse charge basis for purchases made from a composition dealer.

      Regards,
      Bhavana Nagendra

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