GST Composition Scheme – Question Answers with Chartered Accountant: To make India a developed country from a developing country, people of the country must pay taxes. It can not be a fundamental right to not pay tax at the present time. If tax on your income is taxed then tax will be given. Finance Minister Arun Jaitley appealed the people of the country to change the mindset about tax for the first time after the Goods and Services Tax was introduced in the country. In this article we provide some very important question asked by trader to Chartered accountant related to GST Composition Scheme…

The following changes were recommended in the Composition Scheme on the basis of discussions held in the 23rd meeting of the GST Council held at Guwahati today.

  • Uniform rate of tax @ 1% under composition scheme for manufacturers andtraders (for traders, turnover will be counted only for supply of taxable goods). No change for composition scheme for restaurant.Supply of services by Composition taxpayer upto Rs 5 lakh per annum will be allowed by exempting the sameAnnual turnover eligibility for composition scheme will be increased to Rs 2 crore from the present limit of Rupees 1 crore under the law. Thereafter, eligibility for composition will be increased to Rs. 1.5 Crore per annum.The changes recommended by GST Council at (ii) and (iii) above will be implemented only after the necessary amendment of the CGST Act and SGST Acts.

GST Composition Scheme

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Further, if in case a taxable person has different business segments (like Textile, Grocery etc) having same PAN as held by the taxable person, he must register all such businesses under the scheme. Hence, all the business under one PAN should opt for Composition scheme.

  • i) Any service provider except restaurant service
  • ii) Person dealing in goods which are not covered under this act like Liquor
  • iii) Person having interstate supply
  • iv) Person supplying through e-Commerce operator
  • v) Person manufacturing goods as notified by government

Also, please note that any person registered under composition scheme will not be eligible to claim any input tax credit.

Also, instead of monthly returns, there are quarterly returns in composition scheme which makes this scheme easier form the point of view of compliance. We will discuss on the returns requirement under GST in our next discussion.

Also, he shall mention the words “Composition Taxable person” on every notice or signboard displayed at place of business.

*Latest update as per 22nd GST Council Meeting held on 6th Oct 2017

Threshold for composition scheme has been increased to 1 crore (from earlier 75 lakhs)

MJL & Co, Jaipur (Chartered Accountants)

Email – MJLco.jaipur@gmail.com (ph – 0141-4915113)

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