What is composition Scheme IN GST?

Composition Scheme u/s 10 of cgst act 2017 is a simple scheme under GST can be opted by those taxpayers whose turnover is less than 1.5 Crores. Or Rs 75 lakhs for following below states

i) Arunachal Pradesh, (ii) Manipur, (iii) Meghalaya, (iv) Mizoram, (v) Nagaland, (vi) Sikkim, (vii) Tripura, (viii) Uttarakhand.

>Small taxpayers can pay GST at a fixed rate of turnover.

For Service provider?

>service provider can opt into the Composition Tax Scheme,threshold turnover is Rs. 50 lakhs.

>As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of 10% of turnover, or Rs.5 lakhs, whichever is higher.

>Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

conditions for availing Composition scheme? 

>No Input Tax Credit can be claimed 

>Can not supply GST exempted goods.

>Tax paid on RCM basis.

>Has to mention the words ‘composition taxable person’ on every notice, Bills or signboard displayed prominently at their place of business.

A big relief for Manufacturer

>A manufacturer or trader can now also supply services to an extent of 10% of turnover, or Rs.5 lakhs, whichever is higher.(Amendment)

>For composition scheme a taxpayer has to file GST CMP-02 for registration.

>Dealer has to issue a bill of supply.

>Mention “composition taxable person, not eligible to collect tax on supplies”  at the top of the Bill of Supply.

Rates Applicable (cgst+sgst)

Manufacturer and traders.            1%

Restaurant not serving alcohol     5%

Other service provider.                   6%

Return? 

A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. 

An annual return GSTR-9A has to be filled.

Disadvantage 

1. No ITC claimed 
2. No Interstate Supply
3. Not eligible to sell exempt goods
4. Not eligible to sell through E-commerce operator.

Advantage

1. Less Paper Work
2. Single Rate of Taxation 

Here above discussed about Composition Scheme.

If any kind of suggestions or Amendments  that will be highly appreciated.