Composition Scheme under GST

What is the main benefit of the Composition Scheme under GST?

Who is eligible for the Composition Scheme for goods based on turnover limit?

What is NOT a requirement for suppliers opting for the Composition Scheme?

Why can't Composition Dealers avail the benefit of Input Tax Credit?

Which states/UTs have a lower turnover limit for composition levy for goods?

What document do suppliers under the Composition Scheme need to issue instead of a tax invoice?

Composition Levy and Scheme

The Composition Scheme is a simple and easy scheme under GST that allows small taxpayers to pay GST at a fixed rate of turnover and avoid tedious GST formalities.

Objectives of Composition Scheme

To bring simplicity to small taxpayers
To reduce compliance costs for small taxpayers

Benefits of Composition Scheme

Suppliers opting for the composition scheme do not need to classify goods or services or determine applicable GST rates
They do not need to raise tax invoices, but must issue a Bill of Supply without charging tax to the recipient
They only need to file a yearly return (GSTR 4) and make quarterly tax payments

Important Notes

Composition Dealers cannot claim Input Tax Credit
Registration under GST is compulsory for opting for the composition scheme

Composition Scheme Eligibility for Goods

Registered persons with an aggregate turnover of ₹1.5 crore or less in the last financial year are eligible
Turnover limits for composition levy for goods are: • ₹75 lakh for Arunachal Pradesh, Uttarakhand, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura • ₹1.5 crore for all other states/UTs

Learn about the Composition Scheme in GST, designed for small taxpayers to simplify tax formalities and pay GST at a fixed turnover rate. Explore the objectives and benefits of the Composition Scheme, including reduced compliance costs and simplified tax classification.