Focus Topic:Composition Scheme under GST(Goods and Services Tax)
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Comprehensive academic guide covering core concepts of Composition Scheme under GST(Goods and Services Tax).
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Composition scheme under GST(Goods and Services Tax) is a very convenient scheme made for small-scale industries or businesses. In this scheme, the taxpayer has a fixed rate of tax on their aggregate turnover. Any taxpayer can opt this scheme if their aggregate turnover is less than 1.5 Crore or 75 lacs (latest update as per 23RD GST Council meeting held on 10th Nov 2017) in North-Easter states and Himachal Pradesh.
Key feature: -
Fixed Rate of Tax on Aggregate Turnover
ITC (Input Tax credit) not eligible
Only eligible for intra-state supplies
The bill of supply is not a tax invoice.
Eligibility made on basis of Aggregate supplies
Monthly Returns are not required file only Quarterly Returns
Not need to maintain records.
Single time Tax payment and easy to calculate.
Reduce the workload on small business who trying to grow.
You can understand much better in an example given below: -
Example of Composition Scheme under GST
GST Percentage to be payable as per your type of business shown under: -
The rate of GST under the composition scheme under GST
Who can opt Composition scheme under GST?
Anyone who can fulfil the following conditions: -
Whose aggregate turnover is less than 1.5 Crore or 75 lacs in North-Easter states and Himachal Pradesh?
Who is dealing with intra-state supplies only?
Who is not supplying your goods through E-Commerce marketplace?
Who is dealing with exempted supplies of goods under GST?
Who is not the Casual taxable person?
Who is not a Non-Resident taxable person?
Who is not dealing with tobacco, pan masala, and ice cream?
All Services provider expect restaurant related services.
Following are some condition which has to fulfil availing composition scheme under GST
All the above requirements are conditions but some more as following: -
All business registered with the same PAN are treated as composition supply and total aggregate turnover will be fall within the threshold limit.
The taxpayer has to mention “Composite taxable person” on their every bill of supply, notice and signboard place at their business premises.
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Author & Educator
Sarbjit SinghB.Com and M.Com
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
❓ Frequently Asked Questions
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This guide covers "Composition Scheme under GST(Goods and Services Tax)", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Goods and Services Tax (GST).
Who can benefit from this guide on "Composition Scheme under GST(Goods and Services Tax)"?
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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