To simplify the GST compliance for small businesses, CGST Act provides for "Composition Levy". Composition scheme is a simple and easy scheme under GST for small business owners. Small taxpayers can take advantage of this scheme. In this scheme, dealers are liable to pay GST at a fixed prescribed rate of turnover/sales.
|Type of Dealer||Aggregate turnover during preceding year||Aggregate turnover during current year|
|Manufacturers & Traders||Upto INR 1.50 Crores||Upto INR 1.50 Crores|
|Restaurants not serving alcohol||Upto INR 1.50 Crores||Upto INR 1.50 Crores|
|Service providers||Upto INR 50 Lacs||Upto INR 50 Lacs|
For excess turnover, dealers will be liable to pay GST at regular rate.
Aggregate Turnover: For the purpose of computation of threshold limit, aggregate turnover, i.e., turnover for all businesses registered under the same PAN, shall be considered. It is sum of value of all outward supplies falling in the following four categories:
However, it doesn't include the value of inward supplies on which tax is payable by a person on a reverse charge basis and taxes including cess paid under GST law.
Following are the compliances required in case of composition scheme under GST:
Form GSTR-4: To be filed quarterly by the 18th of the month following each quarter.
Form GSTR-9A: Annual return to be filed by the 31st of December of the next financial year.
Applicable GST Rates under GST Composition Scheme
|Type of Business||CGST||SGST||Total GST|
|Manufacturers and traders of goods||0.5%||0.5%||1%|
|Restaurants (not serving alcohol)||2.5%||2.5%||5%|
When a taxpayer opts out this GST scheme, he will be charged normal tax rates and will have to follow normal GST rules from the day he opted out.
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