Railway Accounts Department Examinations

Showing posts with label Composition Scheme. Show all posts
Showing posts with label Composition Scheme. Show all posts

Tuesday, December 25, 2018

Composition Scheme in GST

Composition Scheme

ü  Opted by any Taxpayer whose turnover is less than Rs. 1.5 Crores  (Rs.75 Lakhs in case of North Eastern States).

ü  A simple and easy scheme under GST for taxpayers.

ü  Taxpayers who opted Composition scheme can get rid of tedious GST formalities

ü  Pay GST at a fixed rate of turnover.

ü  Service Providers are not eligible for Composition Scheme.  But Restaurants are eligible.

ü  GST rates under Composition scheme are as follows.

Type of Business
Manufacturer and Trader
0.5 %
1 %
5 %

Who cannot opt for Composition Scheme

ü  Supplier of services
ü  Manufacturer of ice cream, pan masala, or tobacco
ü  Businesses which supply goods through an e-commerce operator
ü  A dealer, who carrying out Inter-State transactions.


ü  Lesser compliance i.e., returns, maintaining books of record, Issuance of invoices.
ü  Limited tax liability.
ü  High liquidity as taxes are at a lower rate i.e., 5% or 1%.


ü  A limited territory of business. The dealer is barred from carrying out inter-state transactions
ü  No Input Tax Credit available to composition dealers
ü  The taxpayer will not be eligible to supply exempt goods or  goods through an e-commerce portal.