GST act had given benefits to different kinds of traders and supplier of services for easy compliance and enabling active participation of all traders in business circle by allowing gst compositon scheme registration. Once of the benefit provided by GST act is gst composition scheme for small traders of goods and supplier of services which helps them to pay reduced rates of taxes and minimum compliance’s, initially composition scheme was available only to supplier of goods and further it was extended to supplier of services.
Eligibility for gst composition scheme
All supplier of services and supplier of goods are eligible except the following
1. Manufacturer of ice cream, pan masala, or tobacco
2. Person making inter-state supplies ie person supplying sale between different states is not eligible
3. Casual taxable person or a non-resident taxable person
4. E commerce sellers of goods and supplier of services.
- GSTR-4, Only 1 Return per Quarter.
- Reduced rates of tax as follows
Manufacturer and trader – 1% (.5+.5)
Restaurants not serving alcohol – 5% (2.5+2.5)
Other service providers – 6% (3 +3)
- Minimum compliance
1. Dealer should issue Bill of supply that is similar to invoice copy but it should not mention tax amount etc.
2. Cannot make inter state supply.
3. Every Bill of supply and prominent places of business should mention “COMPOSITION TAXABLE PERSON”
4. Should re assess every financial year and opt for the scheme if interested.
5. Input tax credit cannot be claimed
6. Cannot sell exempted goods or services.
7. Should include all turnover under same PAN. and should be opted for all registration under same PAN.