CA. Bhavik P. Chudasama
Quick Summary
Introduction The Composition Scheme under the Central Goods and Services Tax (CGST) Act is a simple tax scheme designed for small businesses and service providers with a turnover of up to Rs. 1.5 crore per annum. This scheme simplifies the tax compliance process and reduces the tax burden for sma
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FAQ :
The GST Composition Scheme is a simplified tax scheme under the CGST Act designed for small businesses and service providers with an annual turnover of up to Rs. 1.5 crore, aiming to reduce their tax compliance burden.
Eligibility requires an annual turnover of up to Rs. 1.5 crore, no inter-state supplies of goods or services, not manufacturing notified goods (like ice cream, tobacco, pan masala), and not being a non-resident taxable person or registered under the reverse charge mechanism.
Manufacturers and traders of goods pay 1% of turnover, restaurant owners pay 5% of turnover, and service providers pay 6% of their turnover.
Key forms include GST CMP-02 to opt in, GST CMP-03 to withdraw, GST CMP-04 for changes, GST CMP-05 to report ineligibility, and GST CMP-06 to pay taxes.
Yes, service providers engaged in inter-state supplies, those using e-commerce platforms, or supplying services not leviable under GST are not eligible for the Composition Scheme.
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