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Intimation to pay composition tax

Required Documents

gainme services

Copy of GST Registration Certificate

gainme services

DSC of authorized person (in case of companies)

Required Documents

Copy of GST Registration Certificate

DSC of authorized person (in case of companies)

Frequently Asked Question

Who are eligible to opt for composition scheme of GST levy?

Eligible taxpayers for opting-in for composition scheme:-

  • The normal taxpayers supplying goods having aggregate turnover below Rs. 1.5 Crores in the previous financial year, who does not want to avail ITC facility and located in states other than special category states
  • The normal taxpayers supplying goods having aggregate turnover below Rs. 75 Lakhs in the previous financial year situated in the following states:-
    • Arunachal Pradesh
    • Manipur
    • Meghalaya
    • Mizoram
    • Nagaland
    • Sikkim
    • Tripura
    • Uttarakhand
  • The normal taxpayers supplying services and/or mixed supplies having aggregate turnover of previous financial year below Rs. 50 Lakhs

 

Who are not eligible for opting-in for composition scheme of GST levy?

Taxpayers who are not eligible for opting-in composition scheme:-

  • Suppliers of goods/services who are not covered under GST (Petroleum products)
  • Inter-state outward supplier of goods/services
  • Taxpayers who are supplying through e-commerce operators, who are required to collect TCS u/s 52
  • Manufacturers of notified goods like:
    • Ice cream and other edible ice, whether or not containing cocoa
    • All goods i.e. Tobacco and manufactured tobacco substitutes
    • Pan Masala
    • Aerated water
  • Casual Taxable Person
  • Non-Resident Taxable Person
  • A person registered as Input Service Distributor
  • A person registered as TDS deductor/collector

When will a person opting for composition levy pay tax?

A person opting for composition levy will have to pay tax on quarterly basis before 18th of the month succeeding the quarter

A person availing composition scheme during a financial year crosses the turnover of Rs. 1.5 crores/75 Lakhs/50 Lakhs during the course of the year?

Will he be allowed to pay tax under composition scheme for the remainder of the year i.e. 31st March?

The option to pay tax under composition scheme lapses from the day on which the aggregate turnover exceeds the specified limit of Rs. 1.5 crores/75 Lakhs/50 Lakhs. He is required to file intimation for withdrawal from scheme in Form GST CMP-04 within 7 days from the day on which the threshold limit is crossed.

However, such person shall be allowed to avail ITC in respect of stock of inputs and inputs contained in semi-finished or finished goods held in stock by him and on capital goods held by him on the date of withdrawal and furnish a statement within 30 days of withdrawal containing details of such stock held in Form GST ITC-01.

Can a person who has opted to pay tax under the composition scheme avail Input tax Credit on his inward supplies?

No, a taxable person opting to pay tax under the composition scheme cannot claim input tax credit, till he is under composition levy.

Can a registered person, who purchases goods from a taxpayer paying tax under composition scheme, avail credit of tax paid on purchases made from composition dealer?

No, the composition dealer cannot collect tax on outward supplies from his customers, therefore, any person making purchase from a composition dealer cannot avail input tax credit.

Can the option to pay tax under composition levy be exercised at any time during the year?

No, the option is required to be exercised before commencement of the relevant financial year by filing Form GST CMP-02.