Composition Dealer under GST Regime

Composition Dealer under GST Regime


   In GST regime the Govt supported small dealers through Composition Scheme in which it reduce burden of compliance in GST concept for filing return.

In this article we are discussing the doubts which will be raised by the business community related to GST Scheme .


Who can opt for Composition Scheme ?

Answer : Business dealing only in goods can only opt for composition scheme.Service providers have been kept outside the scope of this scheme.However ,restaurant sector taxpayers may also opt for the scheme.And your annual turnover should below Rs 50 Lakhs


What is tax rate applicable on composite dealer ?


Answer : A registered taxpayer , who is registered under the composite scheme will pay tax at rate not more than 1% for manufacturing ,2.5% for restaurant sector and .5% for other suppliers of turnover.


Must a Composition Dealer maintain detailed records ?

Answer: No a dealer registered under composition scheme is not required to maintain detailed records as in the case of a normal taxpayer


Do Composition Dealers have the option to avail Input Tax Credit ?

Answer: No,a Composition Dealer is not allowed to avail input tax credit of GST paid to their supplier


Can a Composite Dealer issue Tax Invoice ?

Answer: No Since a Composition Dealer  is not allowed to avail input tax credit , such a dealer cannot issue a tax invoice as well . A buyer from composition dealer will not able to claim input tax on such goods.



Can a dealer involved in interstate supplies opt for Composition Scheme?

Answer: No, Composition scheme is availiable only for intra -state supplies . If dealer is involved in inter-state supplies then he cannot opt for the scheme


What are the transition provisions if a business transits from composition scheme under current regime to Regular Taxation under GST?


Answer: Tax payers registered under composition scheme under the current regime will be allowed to take credit of input held in stock,or in semi finished goods or in finished goods on the day immediately preceding the date from which they opt to be taxed as a regular tax payer


Which returns are required to be filed by a taxable person registered under composite scheme ?


Answer : The taxable person is required to furnish only one return i.e. GSTR-4 on a quarterly basis and an annual return in FORM GSTR-9A


Is liability to pay taxes under Reverse Charge Mechanism covered under the composite scheme?


Answer: Any tax payable under Reverse Charge Mechanism will not be covered under the scheme.These taxes will be liable to be paid as a normal tax payer.

Can a Composition Dealer collect composition tax separately ?

Answer: No a Composition Dealer is not allowed to collect composition tax from buyer


What is the threshold limit to be eligible for composition scheme ?

Answe:Any dealer whose aggregate turnover in a financial year does not exceed Rs 75 Lakh can opt for composition scheme.





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