Composition Scheme under GST- Scope

  • Small taxpayers with an aggregate turnover in a preceding financial year up to Rs. One Crore (75 lakhs for special category States – except Jammu & Kashmir and Uttarakhand) shall be eligible for composition levy.
  • This scheme is basically for suppliers of goods and restaurant service providers only.
  • Under the scheme, a taxpayer shall pay tax as a percentage of his turnover in a state during the year without the benefit of ITC.
  • The rate of tax for CGST and SGST/UTGST shall not exceed [2% for manufacturer & 1% in other cases; 5% for specific services as mentioned in para 6(b) of Schedule II viz serving of food or any other article for human consumption i.e. restaurant service providers].
  • A tax payer opting for composition levy shall not collect any tax from his customers.
  • Tax payers making inter- state supplies (except persons making inter-state supplies of certain specified handicraft goods) or making supplies through e-commerce operators who are required to collect tax at source shall not be eligible for composition scheme.
  • Also manufacturers of icecream, pan masala and tobacco products will not be eligible for composition scheme.


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