The last date for submission of intimation of composition scheme in on or before 21st July, 2017. The motto is to issue the registration certificate, called Goods and Services Tax Identification Number (GSTIN), to taxpayers who have already been issued provisional ID for registration (PID) as well as to the new taxpayers.

Let’s have a quick look to the various aspects of Composition Scheme.

Eligibility Criteria

A registered person, whose aggregate turnover in the preceding financial year did not exceed INR 75,00,000 – In the following criteria (called Special Category States, except Uttarakhand, the threshold limit is INR 50,00,000.

  1. Arunachal Pradesh
  2. Assam
  3. Manipur
  4. Meghalaya
  5. Mizoram
  6. Nagaland
  7. Sikkim
  8. Tripura and
  9. Himachal Pradesh

Conditions to be Satisfied

The registered person shall be eligible to opt under this scheme, if he satisfies following conditions:

  1. He is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II
  2. He is not engaged in making any supply of goods which are not leviable to tax under this Act
  3. He is not engaged in making any inter-State outward supplies of goods;
  4. He is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and
  5. He is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council

Rate of Tax of the Composition Levy

Category of Registered Persons Rate of Tax
Manufacturers, Other than Manufacturers of such goods as may be notified by the Government One percent
Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II Two and a Half percent
Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter Half percent

Key Highlights of Composition Scheme:

  1. Non availability for Input Tax Credit
  2. No need to file fresh intimation every year
  3. Less Compliances
  4. Restricted to only Intra- State Supplies
  5. High Liquidity

Process on Intimation Under Composition Scheme

A person who are registered under VAT Act, Service Tax, Central Excise etc, are being granted registration under GST on provisional basis and who opts for composition scheme, shall file an intimation in FORM GST CMP-01 on or before 21st July, 2017.

Filling of Form GST CMP- 03

A person shall also file FORM GST CMP- 03 within 60 days of exercise of option:

  1. Details of stock
  2. Inward supply of goods received from unregistered persons held by him on the date preceding the day of exercise of option

Effective date of Composition Scheme

For persons already registered under pre-GST regime, the effective date of composition scheme shall be the Appointed Day.

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Content Courtesy:

CS Ekta Maheshwari

Taxguru.in

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