Rates
Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC. The rate of tax for CGST and SGST/ UTGST each shall not exceed -
• 5% in case of restaurants etc (2.5% CGST + 2.5% SGST)
• 2% of the turnover in a state / UT in case of a manufacturer(1% CGST + 1% SGST)
• 1% of the turnover in state / UT in case of other suppliers.(0.5% CGST + 0.5% SGST)
A taxpayer opting for composition levy shall not collect any tax from his customers nor shall he be entitled to claim any input tax credit.
The composition scheme is optional. Taxpayers making inter-State supplies shall not be eligible for composition scheme.
Returns
A composition dealer will enjoy the benefits of lesser returns & compliance along with payment of taxes at nominal rates. A composition dealer will file only 2 returns:
Return Form |
Particulars |
Interval |
Due Date |
GSTR-4 |
Return for compounding taxable person |
Quarterly |
18th of the month succeeding quarter |
GSTR-9A |
Annual Return |
|
31st December of next financial year |
Excluded
Taxable Persons Excluded from the Composition Scheme :
Following taxable persons are not granted permission to opt for the scheme who:
- Supplies goods not leviable under the Act
- Supplies services
- Makes a supply of goods other than intra state i.e. interstate or import / export
- Makes a supply of goods through Electronic Commerce Operator i.e. Ecommerce and liable to collect taxes
- Manufactures such goods as may be notified
In case a taxable person has different business segments having same PAN, he must register all such businesses under the scheme.
If an individual has different business segments such as :
- Textiles
- Electronics
- Food Items
then he must register for all the above segments collectively under the composite scheme or simply opt not for the scheme.