This Scheme is for Small Business who cannot maintain detailed books of accounts and records.

Why GST Composition Scheme is introduced

Normally, an assesse under GST has to maintain proper records of Output and Input and pay Monthly Returns every month+ One Annual Return

This is not possible for small business.

For such business, Government has introduced composition scheme under GST.

As per this Scheme, No Input is available to Composition Dealer. However, he has to pay Output at less Rate

Also Instead of monthly 3 returns, he can file Quarterly One Return annually plus one Annual Return and pay tax quaterly

Hence, this scheme is for easy compliance of GST Law of small business

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Turnover Limit for composition  scheme

If turnover upto 100 lacs, then Composition Scheme can be availed

This to be shown in increase to 150 lacs from 1st April 2019 

For north eastern state and uttarakhand limit has been increased from 50 lac to 75 lac 

 

Till 31st March 2019 and From 1st April 2019.jpg

 

Summary of Rates for composition scheme

Type of Business

TILL 31 DEC 2017

FROM 1 JAN 2018

FROM 1 APRIL 2019

Trader

1%

1%

1%

Manufacturer

2%

2%  1%

2%  1%

Restaurant

5%

5%

5%

Other services

N/A

N/A 6%

Government has changed GST Rates for Manufacturers from 2% to 1% Notification 1/2018

Hence, now GST Rates are similar for Traders and Manufacturers

New Amendment from 1 April 2019

  • In case of service provider (except restaurant)
  • If turnover is upto 50 lac, then 6% Rate of tax for composition scheme
  • Till 31st March 2019, composition scheme was not available to such service provider

 

Can Composition Dealer Provide Service?

Composition scheme is applicable to

  1. Traders
  2. Manufacturers
  3. Restaurant Business, (It is not available to other services Like CA, Consultancy Service etc)

From 1 Feb 2019, Composition dealers in goods allowed to supply services for a value not exceeding – Higher of 10% turnover or Rs 5 lacs, whichever is higher.

New Amendment from 1 April 2019

  • In case of service provider (except restaurant)
  • If turnover is upto 50 lac, then 6% Rate of tax for composition scheme

 

Return and Due Date for Composition Scheme

  • It is normally 18th of next Quarter
  • However Due date of Return for July-September has been extended to 24 Dec 2017
  • Gstr-4 has to be filed for Composition Dealer

 

Period Due Date
July-Sep 2017  24 Dec 2017
Oct-Dec 2017 18-Jan-18
Jan-March 2018 18-Apr-18
April-June 2018 18-Jul-18
July-Sep 2018 18-Oct-2018
Oct-Dec 2018 18-Jan-2019
Jan-March 2019 18-Apr-2019

 

New amendment from 1 April 2019

Composition dealer needs to pay tax quarterly by 18 th of next quarter  in form CMP-08

And file return annually GSTR 4

PERIOD

DUE DATE

RETURN/PAYMENT FORM NAME

APRIL-JUNE

18 JULY 2019  31 August 2019

CMP-08(PAYMENT FORM)

JULY-SEPTEMBER

18 OCTOBER 2019

CMP-08(PAYMENT FORM)

OCTOBER-DECEMBER

18 JANUARY 2020

CMP-08(PAYMENT FORM)

JANUARY-MARCH

18 APRIL 2020

CMP-08(PAYMENT FORM)

APRIL 2019-MARCH  2020

30 APRIL 2020

GSTR -4 (RETURN)

APRIL 2019-MARCH 2020

31 DECEMBER 2020

GSTR 9A (ANNUAL RETURN)

Option to Avail Composition Scheme

Person can change from Normal Scheme to  Composition Scheme

Suppose scheme opted in one month will be effective from Next Month

Example

Normal Dealer opts for Composition Scheme by 20 Nov 2018

He will file Composition Dealer Return and Tax starting from 1 Dec 2018

Normal Dealer Opts For Composition Scheme.jpg

 

  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.