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    GST Notes

    Uploaded by

    Crick Compact
    This document provides information about India's GST Composition Scheme. Key points include: - Taxpayers with annual turnover up to Rs. 1.5 crore can opt for the Composition Scheme, which allows payment of a lower fixed tax rate instead of the normal GST rates. - Composition dealers must pay tax quarterly and file an annual return. They cannot claim input tax credit or make inter-state supplies. - Tax rates under the Composition Scheme range from 1-5% depending on the type of business. Eligible businesses include traders, restaurants, manufacturers. - While it offers benefits like lower compliance and tax costs, the scheme also has limitations such as no input tax credit and restrictions

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    GST Notes

    Uploaded by

    Crick Compact
    86 views39 pages
    This document provides information about India's GST Composition Scheme. Key points include: - Taxpayers with annual turnover up to Rs. 1.5 crore can opt for the Composition Scheme, which allows payment of a lower fixed tax rate instead of the normal GST rates. - Composition dealers must pay tax quarterly and file an annual return. They cannot claim input tax credit or make inter-state supplies. - Tax rates under the Composition Scheme range from 1-5% depending on the type of business. Eligible businesses include traders, restaurants, manufacturers. - While it offers benefits like lower compliance and tax costs, the scheme also has limitations such as no input tax credit and restrictions

    Original Description:

    GST Notes which is helpful for examination And for other examination which will give marks

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    This document provides information about India's GST Composition Scheme. Key points include: - Taxpayers with annual turnover up to Rs. 1.5 crore can opt for the Composition Scheme, which allows payment of a lower fixed tax rate instead of the normal GST rates. - Composition dealers must pay tax quarterly and file an annual return. They cannot claim input tax credit or make inter-state supplies. - Tax rates under the Composition Scheme range from 1-5% depending on the type of business. Eligible businesses include traders, restaurants, manufacturers. - While it offers benefits like lower compliance and tax costs, the scheme also has limitations such as no input tax credit and restrictions

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    86 views39 pages

    GST Notes

    Uploaded by

    Crick Compact
    This document provides information about India's GST Composition Scheme. Key points include: - Taxpayers with annual turnover up to Rs. 1.5 crore can opt for the Composition Scheme, which allows payment of a lower fixed tax rate instead of the normal GST rates. - Composition dealers must pay tax quarterly and file an annual return. They cannot claim input tax credit or make inter-state supplies. - Tax rates under the Composition Scheme range from 1-5% depending on the type of business. Eligible businesses include traders, restaurants, manufacturers. - While it offers benefits like lower compliance and tax costs, the scheme also has limitations such as no input tax credit and restrictions

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 39

    Salary -

    ‘
    X- entity – Mr A------------------- y entity
    1lac- 5%

    Intra

    b/w 2 states-inter-IGST

    CGST-2.5

    UTGST-2.5
    Composition Scheme

     taxpayer whose turnover is below Rs 1.5 crore* can opt for Composition
    Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is
    now Rs 75* lakh. As per the CGST (Amendment) Act, 2018, a composition
    dealer can also supply services to an extent of ten percent of turnover, or Rs.5
    lakhs, whichever is higher. This amendment will be applicable from the 1st of
    Feb, 2019. Further, GST Council in its 32nd meeting proposed an increase to
    this limit for service providers on 10th Jan 2019*. Turnover of all businesses
    registered with the same PAN should be taken into consideration to calculate
    turnover.

    *CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs.
    1.5 Crores.  

    Who cannot opt for Composition


    Scheme
    The following people cannot opt for the scheme-

     Manufacturer of ice cream, pan masala, or tobacco

     A person making inter-state supplies

     A casual taxable person or a non-resident taxable person

     Businesses which supply goods through an e-commerce operator


    What are the conditions for availing
    Composition Scheme?
    The following conditions must be satisfied in order to opt for composition
    scheme:

     No Input Tax Credit can be claimed by a dealer opting for composition


    scheme

     The dealer cannot supply goods not taxable under GST such as alcohol.

     The taxpayer has to pay tax at normal rates for transactions under the
    Reverse Charge Mechanism

     If a taxable person has different segments of businesses (such as textile,


    electronic accessories, groceries, etc.) under the same PAN, they must
    register all such businesses under the scheme collectively or opt out of
    the scheme.

     The taxpayer has to mention the words ‘composition taxable person’ on


    every notice or signboard displayed prominently at their place of
    business.

     The taxpayer has to mention the words ‘composition taxable person’ on


    every bill of supply issued by him.

     As per the CGST (Amendment) Act, 2018, a manufacturer or trader can


    now also supply services to an extent of ten percent of turnover, or Rs.5
    lakhs, whichever is higher. This amendment will be applicable from the
    1st of Feb, 2019.
    How can a taxpayer opt for
    composition scheme?
    To opt for composition scheme a taxpayer has to file GST CMP-02 with the
    government. This can be done online by logging into the GST Portal. This
    intimation should be given at the beginning of every Financial Year by a
    dealer wanting to opt for Composition Scheme. Here is a step by
    step Guide to File CMP-02 on GST Portal.

    How Should a Composition Dealer


    raise bill?
    A composition dealer cannot issue a tax invoice. This is because a
    composition dealer cannot charge tax from their customers. They need to pay
    tax out of their own pocket. Hence, the dealer has to issue a Bill of
    Supply. The dealer should also mention “composition taxable person, not
    eligible to collect tax on supplies”  at the top of the Bill of Supply.

    6. What are the GST rates for a


    composition dealer?
    Following chart explains the rate of tax on turnover applicable for composition
    dealers :
    As per notification dated 01.01.2018, turnover in case of traders has been
    defined as ‘ Turnover of taxable supplies of goods’.

    How should GST payment be made


    by a composition dealer?
    GST Payment has to be made out of pocket for the supplies made. The GST
    payment to be made by a composition dealer comprises of the following:

     GST on supplies made.

     Tax on reverse charge

     Tax on purchase from an unregistered dealer*

    *Only on the specified categories of goods and services and well as the
    notified class of registered persons with effect from 1st Feb 2019 but is yet to
    be notified. Hence, not applicable until then.
    What are the returns to be filed by a
    composition dealer?
    A dealer is required to pay tax in a quarterly statement CMP-08 by 18th of the
    month after the end of the quarter. Also, a return in form GSTR-4 has to be
    filed annually by 30th April of next financial year from FY 2019-20 onwards.
    GSTR-9A is an annual return to be filed by 31st December of the next
    financial year. It was waived off for FY 2017-18 and FY 2019-20. Also, note
    that a dealer registered under composition scheme is not required to maintain
    detailed records.

    What are the advantages of


    Composition Scheme?
    The following are the advantages of registering under composition scheme:

     Lesser compliance (returns, maintaining books of record, issuance of


    invoices)

     Limited tax liability

     High liquidity as taxes are at a lower rate

    What are the disadvantages of


    Composition Scheme?
    Let us now see the disadvantages of registering under GST composition
    scheme:

     A limited territory of business. The dealer is barred from carrying out


    inter-state transactions

     No Input Tax Credit available to composition dealers

     The taxpayer will not be eligible to supply non-taxable goods under GST
    such as alcohol and goods through an e-commerce portal.
    OUT PUT TAX

    INPUT TAX

    PAID or Refund

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