Composition Scheme under GST
It’s hard when to get changed as per with changing conditions, same will happen after implementation of GST. Although to be rational and no hardship on small traders and manufacturers Goods and services Tax Act 2016, came up with some beneficial scheme for small trader, business men , startups, etc called Composition Scheme.
A Taxable registered person who had opted composition scheme can pay GST at following rate.
i. For manufacturer not less than 2.5% rate will be applicable.
ii. For traders not less than 1 % rate will be applicable.
Under Composition scheme, GST has to be paid on gross turnover of trader or manufacturer whose turnover does not exceed Rs. 50 Lakh at the rate of 2.5%/1% , by paying the same trader/manufacturer is exempt for maintaining books of account as mentioned by Act.
Composition Scheme is available to all Traders and Manufacturers however some of entity is kept out this ambit. List of same is as follow
Composition Scheme Cannot be opted by
1. AnService provider.
2. An Inter State Supplier of goods.
3. AnSupplier of exempt goods.
4. An electronic commerce operator who required to collect TCS u/s 56 of GST Act 2016.
5. An manufacturer notified by GST council.
6. An taxable person whose turnover exceeds 50 lakh rupees.
Although as per Experts Rs. 50 Lakh limit is very low , still its going to help small traders , Manufacturers and Service Providers.