Category: Composition Levy

A manufacturer is eligible to avail composition scheme except manufacturers:
(a) whose aggregate turnover in the preceding financial year crossed Rs. 75 lakhs;
(b) who have purchased goods or services from unregistered suppliers unless they have paid GST on such goods or services on reverse charge basis;
(c) who make any inter-State outward supplies of goods;
(d) who make supply of goods through an electronic commerce operator;
(e) who manufacture the following goods.
1.  Ice cream and other edible ice, whether or not containing cocoa

2. Pan masala

3. Tobacco and manufactured tobacco substitutes.

(FAQ 34: MSME)

Composition rate for manufacturers is 2% (1% CGST and 1% SGST).

(FAQ 33: MSME)

Composition scheme is optional and intimation that option has been availed should be made electronically in FORM GST CMP-01 by the migrating taxable person. A person who has already obtained registration and opts for payment under composition levy subsequently needs to give intimation electronically in FORM GST CMP-02.

(FAQ 32: MSME)

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 9 special category States, the limit of turnover is Rs.50 Lakhs in the preceding financial year, namely – Arunachal
Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Himachal Pradesh. However, if you are a manufacturer of ice-cream, pan masala or tobacco or tobacco products or if you are a service provider other than a restaurant, you are not eligible for composition scheme.

(FAQ 31: MSME)

Yes. 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 for special category States, excluding J&K and Uttrakhand). It is a kind of turnover tax. The objective of the scheme is to provide a simplified tax payment regime for the small tax payers. The scheme is optional and is mainly for small traders, manufacturers and restaurants.

(FAQ 30: MSME)

A normal invoice has to be issued irrespective of whether the buyer is under composition scheme or not. The difference would be only when you receive supplies from the person registered under the composition scheme.

(FAQ-7(d) TEXTILES)