[Important]Composition Scheme-Due Dates and Rates for GST

Eligibility

Composition Scheme is can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore*.

Persons cannot opt for the scheme

• Manufacturer of ice cream, pan masala, or tobacco
• A person making inter-state supplies
• A casual taxable person or a non-resident taxable person
• Businesses which supply goods through an e-commerce operator

Conditions for availing Composition Scheme

The following conditions must be satisfied in order to opt for composition scheme:

• No Input Tax Credit can be claimed by a dealer opting for composition scheme
• The dealer cannot supply goods not taxable under GST such as alcohol.
• The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism
• If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
• The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
• The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
• As per the CGST (Amendment) Act, 2018, a manufacturer or trader can now also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019.
• A return in form GSTR-4 has to be filed annually by 30th April of next financial.
• GSTR-9A is an annual return to be filed by 31st December of the next financial year.

Composition Scheme

1. All persons registered under the Composition Scheme shall file FORM CMP 08 every quarter through the GST Common Portal or through a GST Facilitation Centre.
2. GST return for those enrolled under Composition Scheme is due on the 18th of the month, succeeding a quarter.
3. GST return for composition scheme would be due on April 18th, July 18th, October 18th and January 18th. The GST return filed by a Composition Scheme supplier must include details of:

• Invoice wise inter-State and intra-State inward supplies received from registered and unregistered persons
• Consolidated details of outward supplies made
  Also, if a registered person opted to pay tax under composition scheme from the beginning of a financial year, then the taxpayer must file monthly GST returns on the 10th, 15th and 20th of each month and monthly returns till the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier. Hence, even if a taxable person under GST opted for composition scheme from April onwards, the taxpayer must continue filing monthly GST returns until September.

GST composition  rates:

1. Manufacturers, other than manufacturers of such goods as may be notified by the Government – 1%.
2. Suppliers making supplies – 2.5%
3. Any other supplier eligible for composition levy – 0.5%
4. It is important to note that any taxpayer who has opted for the GST composition scheme will not be eligible to avail input tax credit on receipt of invoices or debit notes from the supplier for the period prior to opting for the composition scheme.

Withdrawing from GST Composition Scheme

Any taxpayer who is withdrawing from a GST Composition scheme must file FORM GST CMP-04 within seven days of the occurrence of event mandating withdrawal from GST composition scheme. Further, after filing the application for withdrawal from GST composition scheme, the taxpayer must file GST returns till the due date of furnishing the return for the quarter ending September of the succeeding financial year or furnishing of annual return of the preceding financial year, whichever is earlier.