In order to minimize the small and retail taxpayers, the GST Council has given an option for the registered taxpayers with minimal compliance requirements and also laid down certain conditions so that they can be in the tax net but still have less burden of filings and accounting.
Under Composition Scheme, the registered taxpayer cannot
issue a regular tax invoice and also claim input tax credit. As per the current
provisions, the threshold limit for composition Scheme is Rs 1.50 Crores expect
in the following states, where the threshold is capped at Rs 75 Lacs.
<!--[if !supportLists]-->o
<!--[endif]-->Arunachal
Pradesh
<!--[if !supportLists]-->o
<!--[endif]-->Manipur
<!--[if !supportLists]-->o
<!--[endif]-->Mizoram
<!--[if !supportLists]-->o
<!--[endif]-->Nagaland
<!--[if !supportLists]-->o
<!--[endif]-->Sikkim
<!--[if !supportLists]-->o
<!--[endif]-->Tripura
&
<!--[if !supportLists]-->o
<!--[endif]-->Uttarakhand
A registered person cannot take registration under GST if he
is meeting any of the of the following conditions
<!--[if !supportLists]-->a)
<!--[endif]-->Dealing
in goods and services not taxable under GST
<!--[if !supportLists]-->b)
<!--[endif]-->Supplies
goods outside the state
<!--[if !supportLists]-->c)
<!--[endif]-->He
is not supplying goods through e-commerce operator who is required to collect
tax at source in GST
<!--[if !supportLists]-->d)
<!--[endif]-->Registered
as tax deductor in GST
<!--[if !supportLists]-->e)
<!--[endif]-->Manufacturing
ice creams, pan masala, tobacco and substitutes of tobacco
<!--[if !supportLists]-->f)
<!--[endif]-->Input
service distributor
<!--[if !supportLists]-->g)
<!--[endif]-->Casual
taxable person
<!--[if !supportLists]-->h)
<!--[endif]-->Non-resident
taxable person
The composition taxpayer will issue a bill of supply in place
of tax invoice on his supplies.
The composition taxpayer has to file GSTR – 4 annually and make
payment of taxes on quarterly basis wide Form GST CMP – 08.
Existing taxpayers who are registered as regular taxpayers
and are willing to opt for composition scheme can file the Form GST CMP – 02 by
30th June 2020.
The taxpayer who are currently under regular registration
scheme and willing to opt for the composition scheme and filed Form GST CMP – 08
and also file another form called Form ITC – 03. In this form, the input tax
credit on the closing stock and capital goods has to be paid. The amount of tax
to be paid on the closing stock and capital goods can be paid through input tax
credit balance if any or through cash.
Logo recommends the taxpayers who are dealing with business
to customer (B2C) segment as they do not claim input tax credit. If the
taxpayer wants to migrate to composition scheme, he has to file GST CMP – 02 by
30th June 2020 and Form ITC – 03 by 31st July 2020.
Disclaimer
Any views or opinions represented above are personal and
belong solely to the author and do not represent those of people, institutions
or organizations that the author may or may not be associated with in
professional or personal capacity unless explicitly stated. Any views or
opinions are not intended to malign any religion, ethnic group, club,
organization, company, or individual.
