Whats the procedure to obtain GST license(Composition scheme). What are the steps involved in it?
Please explain.
3 Replies
Rama chary Rachakonda
(Master in Accounts & high court Advocate)
(8479 Points)
Replied 27 September 2024
Kalyani Srinivas
(33 Points)
Replied 27 September 2024
Does the officer personally come for inspection before approval of my application?
Khushbu Bansal
(student)
(48 Points)
Replied 28 September 2024
Eligibility for Composition Scheme
First, ensure that you meet the eligibility criteria for the composition scheme:
- Turnover limit: The aggregate annual turnover should be below ₹1.5 crore (₹75 lakhs for special category states).
- Type of business: It is available for manufacturers, traders, and small service providers (with some exceptions like e-commerce operators and service providers other than restaurant services).
- Tax rates: Businesses pay tax at a lower fixed rate (1% for manufacturers/traders, 5% for restaurants, 6% for service providers).
Steps to Apply for GST Registration (Composition Scheme)
1. Online Application on GST Portal
- Visit the GST portal.
- Select "New Registration" and fill in basic details such as PAN, email ID, and phone number.
- An OTP will be sent to verify the email and mobile number.
- Choose the "Composition Scheme" option while filling out the details.
2. Filling Out GST REG-01 Form
- Once basic details are verified, proceed with filling the GST REG-01 form.
- Under this form, you’ll need to provide:
- Business name, address, and nature of business.
- PAN, Aadhaar, and other identification details.
- Details of the place of business (if renting, you’ll need a rent agreement; if owned, provide property tax receipts).
- Bank account details.
- Details of business partners/directors, if applicable.
Important: While filling out the application, select the composition scheme to be eligible for lower tax rates.
3. Upload Documents
- Upload the necessary documents like:
- PAN card of the applicant.
- Aadhaar card.
- Proof of business address (electricity bill, property tax receipt, rent agreement, etc.).
- Bank statement or canceled cheque.
- Passport-sized photograph.
4. Submit the Application
- After filling in the details and uploading the documents, submit the application.
- Once submitted, you’ll receive an Application Reference Number (ARN) via email and SMS for tracking the status of your application.
5. Application Review and Verification
- The GST officer will review your application and documents.
- The officer may either approve or reject the application based on the information provided.
Is an Inspection Required?:
- Inspection is generally not required for composition scheme registration.
- However, if the GST officer finds any inconsistencies in the documents, address, or business details, they may initiate an inquiry or even a physical verification of the premises.
- In most cases, if the documents are clear and complete, no personal inspection is carried out.
6. GST Registration Approval
- If everything is in order, the GST officer will approve your application, and you will receive the GSTIN (Goods and Services Tax Identification Number).
- You’ll also receive the GST Registration Certificate (Form GST REG-06) online.
7. Intimation of Composition Scheme Selection
- Once the registration is approved, you need to file GST CMP-02 to inform the authorities that you are opting for the composition scheme.
- This form must be filed before the start of the financial year (or when you begin business).
8. Compliance After Registration
- After registering under the composition scheme, you are required to:
- File quarterly returns in GST CMP-08.
- File an annual return in Form GSTR-4.
- Pay tax at the prescribed composition rates.
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