Composition Scheme under GST

1. Composition Scheme under GST With the Goods and Services Tax system, that was introduced in India in 2017, all other forms of indirect taxes that include central excise duty, service tax, additional custom duty tax, surcharge, state-level VAT and Octroi – all of them got abolished at one go. GST is applicable on all types of transactions involving goods and services including sale, transfer, purchase, barter, lease and import. One of the main advantages of GST is that the GST registration procedure has been simplified and can be done online from the official GST portal. All small business units or taxable persons whose annual turnover is less than 1crore can opt for the GST composition scheme for GST Registration in India. For the North-eastern states and Himachal Pradesh the limit is Rs. 75 lakh. The main benefit of the Composition Scheme is that the business unit needs to follow lesser compliances like returns, invoices etc; have limited tax liability and high liquidity with lower tax rates. In this case, the taxpayer cannot raise a tax invoice which means that he cannot charge tax from his customers – he has to pay the tax himself and thereby raise a Bill of Supply. On the other hand, for businesses that are not registered under the Composition scheme can carry out inter-state trade nor can they take input tax credit. These composition taxpayers are not eligible for supplying GST exempted goods or any other goods through e- commerce platforms. Taxable persons that cannot avail the

2. Composition scheme are –ones who supply exempted goods, supplier of services, manufacturers of ice cream, pan masalas and tobacco, non- resident taxable persons and business that sell via e-commerce. How to apply for the Composition Scheme? All taxpayers who are eligible for the Composition Scheme can do so from the GST portal for GST Registration. The taxpayer needs to inform the Government at the beginning of each financial year that he wants to opt for the Scheme via and apply the GSTCMP-02 application. The words ‘composition taxable person’ needs to be mentioned on all Bills of Supply as well as on all notices and signboards and need to be displayed at a visible location at the place of business. Application process for the Composition Scheme The CMP – 02 is a form that needs to be filled up by a taxable person who wants to opt for the Scheme during the middle of the financial year. The rules of the scheme in this case apply from a month prior to filling up of the form. TheCMP-02 needs to be filled up at the GST Registration online site. a. Log in to the GST official website b. Select Services and then select Registration. Under this click for Application to Opt for Composition Levy. c. Tick on the Composition Declaration and Verification after reading it thoroughly. d. Select the Name of Authorized Signatory and enter the place. Click on Save button.

3. e. Submit the application with the Digital Signature Certificate. f. A pop up with a warning will show up. Click proceed. g. The application is now submitted and an acknowledgement will be emailed and smsed to the registered email id and phone number. The composition taxpayer needs to file GST CMP-03 within 3 months. The form details out the stock held by the taxpayer at the time of opting for the scheme. Source by: https://swaritadvisors.dudaone.com/composition-scheme- under-gst