Category: Composition Levy

Aggregate turnover will be computed on the basis of turnover on an all India basis and will include value of all taxable supplies, exempt supplies and exports made by all persons with same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.

(FAQ 7: COMPOSITION LEVY)

1. No. The option to pay tax under composition scheme lapses from the day on which his aggregate turnover during the financial year exceeds the specified limit (Rs. 75 lakhs / Rs. 50 lakhs). He is rqeuired to file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days from the day on which the threshold limit has been crossed.
2. However, such person shall be allowed to avail the input tax credit in respect of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him and on capital goods held by him on the date of withdrawal and furnish a statement within 30 days of withdrawal containing the details of such stock held in FORM GST ITC-01 on the common portal.

(FAQ 6: COMPOSITION LEVY)

A person opting for composition levy will have to pay tax on quarterly basis before 18th of the month succeeding the quarter during which the supplies were made.

(FAQ 5: COMPOSITION LEVY)

Following persons are not allowed to opt for the composition scheme:
a) a casual taxable person or a non-resident taxable person;
b) suppliers whose aggregate turnover in the preceding financial year crossed Rs. 75 lakhs;
c) supplier who has purchased any goods or servcies from unregistered supplier unless he has paid GST on such goods or services on reverse charge basis;
d) supplier of services, other than restaurant service;
e) persons supplying goods which are not taxable under GST law;
f) persons making any inter-State outward supplies of goods;
g) suppliers making any supply of goods through an electronic commerce operator who is required to collect tax at sourceunder section 52; and
h) a manufacturer of following goods:

1.Ice cream and other edible ice, whether or not containing cocoa                           2.Pan masala                                                                                                                                             3.Tobacco and manufactured tobacco substitutes.

(FAQ 4: COMPOSITION LEVY)

Composition scheme is a scheme for payment of GST available to small taxpayers whose aggregate turnover in the preceding financial year did not cross Rs. 75 lakhs. In the case of the following States, the limit of turnover is Rs. 50 lakhs:-
a) Arunachal Pradesh
b) Assam
c) Manipur
d) Meghalaya
e) Mizoram
f) Nagaland
g) Sikkim
h) Tripura
i) Himachal Pradesh

(FAQ 3 : COMPOSITION LEVY)

1.Manufacturers, other than manufacturers of such –  2%( 1% central Sales Tax   goods as may be notified by the government                 plus 1% State Tax) of the  ( Ice-Cream, Pan masala, Tobacco products etc.)           turnover.

2. Restaurant services                                                              –   5%( 2.5% Central tax                                                                                                                            2.5%plus SGST) of the                                                                                                                        turnover.

3.Traders or any other supplier eligible for                     -1%(0.5% central Tax plus      Composition Levy.                                                                      0.5% State Tax) of the                                                                                                                          turnover.

(FAQ 2: COMPOSITION LEVY)

The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 75 lakhs ( Rs. 50 lakhs in case of few States). The objective of composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax at normal rate.

(FAQ 1: COMPOSITION LEVY)

GSTR-4 may be referred for details required to be filled in the return. It is a very simple return containing consolidated details of outward supplies, details of import of services or other supplies attracting reverse charge and inward supplies which shall be auto-populated.

(FAQ 57: MSME)

A registered person under the composition scheme of GST is required to furnish quarterly return called GSTR-4 between the 11th day and 18th day of the month succeeding the quarter.

(FAQ 56: MSME)

No, a registered person under the composition scheme would not need to specify HSN code of their products in bill of supply or return.

(FAQ 55: MSME)