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Composition Scheme under GST is a scheme which offers comparatively lesser compliance activity, as well as a flat rate GST tax rate for small businesses. Thus, it is important for businesses to be clear about, what is the composition scheme under GST.
Any person being granted registration on a provisional basis (registered under VAT Act, Service Tax, Central Excise laws etc) and who opts for Composition Levy shall electronically file an intimation in FORM GST CMP-01, duly signed, before or within 30 days of the appointed date. If intimation is filed after the appointed day, the registered person:
a) Will not collect taxes
b) Issue bill of supply for supplies
FORM GST CMP- 03* must also be filed within 60 days of the exercise of option:
a) Details of stock
b) Inward supply of goods received from unregistered persons held by him on the date preceding the day of exercise of an option
For fresh registrations under the GST Composition Scheme, an intimation in Form GST REG- 01 must be filed.
Every person who registered under GST as a regular dealer, but then opted to pay taxes under the GST Composition Scheme, must provide an intimation in Form GST CMP – 02, communicating his wish to exercise this option, and also, furnish a statement in Form GST ITC-3, containing details of ITC relating to inputs lying in stock, inputs contained in semi-finished or finished goods - within 60 days of commencement of the relevant financial year. However, as per the latest updates, Form GST ITC-03 must be submitted within 90 days from the date of start of the GST composition levy. Also, it is essential to file GST TRAN-1 before Form GST ITC-03 is furnished.
Alternatively, in case a dealer wants to move from composition to regular, he needs to:
7th March 2019
The CBIC has issued a notification increasing the upper limit of annual aggregate turnover (for the previous financial year) to opt into the composition scheme from Rs 1 crore to Rs 1.5 crores. However, the limit remains Rs 75 lakhs for N.E states & Uttarakhand!
The notification comes into effect from 1st April 2019.
For: Any GST registered taxpayer who want to opt for the Composition scheme for FY 2019-20;
31st March 2019 is the deadline to file the intimation in Form GST CMP-02 to opt into composition scheme for the FY 2019-20.
Also, furnish a statement in form ITC-03 within 60 days of commencement of the FY 2019-20 to declare the ITC claim that has to be reversed on inputs/capital goods in stock, in semi-finished or in finished goods.
The option to pay tax under the GST Composition Scheme shall be effective as follows:
The following taxable persons cannot opt for the composition scheme under GST:
A business will need to comply with the following GST composition rules:
A GST composition scheme dealer is required to file a quarterly composition return form i.e. Form GSTR-4 by the 18th of the month after the end of the quarter. Also, an annual composition return form i.e. Form GSTR-9A has to be filed by the 31st of December of the next financial year. All these forms must be duly signed and filed electronically on Common Portal, either directly or through a Facilitation Centre notified by the Commissioner. As per the latest notifications, the late fees for failure to furnish returns in Form GSTR-4 by the composition scheme last date have been waived off to the extent of the amount in excess INR 50 per day for every day the failure continues. In case of the filing of NIL Returns in Form GSTR-4, the late fees for failure to furnish return by the composition scheme last date, have been waived off to the extent of the amount in excess of INR 20 per day for every day the failure continues.
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