Tax with Ria
KF Expert
Composition levy is an optional tax regime for small taxpayers.1.Any businessman supplying goods or restaurant services can opt for Composition scheme under 10(1) & 10(2) of GST Act,2017.
(a) Any businessman supplying goods or restaurant services from the state of - Nagaland, Sikkim, Tripura, Manipur, Meghalaya, Mizoram, Arunachal Pradesh and Uttarakhand having aggregate turnover* upto 75 lakhs in previous F.Y may opt for this scheme.
(b) For remaining states, any businessman supplying goods or restaurant services having aggregate turnover upto 1.5 crore in previous F.Y may opt for this scheme.
2. Any businessman supplying SERVICES OTHER THAN restaurant services can opt for Composition scheme under 10(2A) of GST Act,2017, having aggregate turnover* upto 50 lakh in previous F.Y belonging to any state.
*Aggregate Turnover= Value of taxable supply+exempt supply+export+interstate supply of previous F.Y
(-) CGST/SGST/IGST/cess
(-) RCM payable by taxpayer
(-) Interest/discount received on giving any loans/advances/deposits
What you cannot do after opting for Composition levy?No Inter-state supplies or export
ITC for purchases cannot be availed
No tax to be collected from customers
Cannot issue TAX INVOICE but has to issue BILL OF SUPPLY
Benefits for opting for composition Scheme?You can pay less tax by opting this scheme
GOODS - Manufacturer -------------> 0.5%+0.5% of TURNOVER
Others-----------------------> 0.5%+0.5% of TAXABLE TURNOVER
Restaurant Services--------> 2.5%+2.5% of TURNOVER
SERVICES-Any service provider opting-------> 3%+3% of TURNOVER
composition under 10(2A)
How to apply?Apply in Part B of Registration in Form GST REG 01 in case of fresh registeration.
Effective date to apply is beginning of F.Y i.e 01/04/2024
Quarterly payment of tax in CMP-08 on 18th of next month.
GSTR-4 annually by 30th of April after end of F.Y i.e 30/04/2024
Annual Return by 31st Dec after end of F.Y. i.e 31/12/2024
WHO CANNOT APPLY IN COMPOSITION SCHEME ? SOON TO BE RELEASED IN PART 2
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