Composition Scheme GST
Composition Scheme under GST is a reduced compliance mechanism scheme available for small and medium entities at their option. The taxpayers registering under this scheme will have to pay a fixed percentage of tax on their turnover and will have to file fewer GST returns, as compared to regular taxpayers.
Advantages of GST Composition Scheme:
- The taxpayers don’t need to maintain elaborate accounts and records. The tracking of sales would be sufficient for GST.
- The taxpayers get the benefit of paying taxes quarterly instead of every month.
- The taxpayers can file a simple quarterly return instead of a detailed monthly return.
- The taxpayers can register simple annual returns, as compared to the regular yearly returns.
Limitations Under Composition Scheme in GST:
- The scheme is not available for entities dealing with alcoholic liquor and petroleum products.
- The scheme is not available to those who make sales to other states, SEZ and Export.
- The scheme is not allowed for the sales made through an electronic commerce operator like Amazon & Flipkart.
- The scheme is not applicable for the manufacturers Ice-cream, Pan Masala & Tobacco.
- The scheme is not for the casual taxable person or a non-resident taxable person.
