Description

The objective of composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax at normal rate.

The composition scheme is introduced for small business owners with a turnover of up to Rs. 1.5 crores. While the GST rate can be up to 28% under the regular scheme, the composition scheme has capped the tax rate at 6% for eligible entities. The tax slabs under the composition scheme are 0%, 1%, 2%, 5%, and 6%

Under the regular GST, the supply can be to both inter and intra state. Under the composite GST, the supply can be only intra state. Tax Collection. In the regular GST scheme, tax collection is permitted at the prescribed rates. In the composite GST scheme, tax collection is not permitted.

The Composition Scheme is very helpful to small businesses. Compare to regular GST scheme, the Composition taxpayers are required to file a total of 5 GST Returns ( i.e. Four Quarterly GSTRs in the form of CMP-08 & One annual GSTR in a year in the form of GSTR-4, GSTR-9A return was not yet declared).