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Any taxable person whose aggregate turnover in the preceding financial year is less than Rs. 1.5 Crores and less than Rs. 75 lakhs for North Eastern States can opt for a simplified composition scheme where tax will payable at a concessional rate on the turnover in a state without the benefit of Input Tax credit.
All of this holds true if your annual turnover is below Rs. 1.5 Crores or below Rs. 75 lacs in the case of North Eastern States.
As per 32nd GST Council Meeting held on 10th Jan 2019, Service Providers can opt into the Composition Tax Scheme, and the Government has set the threshold turnover for service providers at Rs. 50 lakhs to be eligible for this scheme.
For a person desiring to opt composition scheme under GST it is necessary that all his branches throughout the country opts for the composition scheme as well, to be eligible to opt for composition scheme.
|Type of Dealer||Composition Scheme GST Rate : CGST||Composition Scheme GST Rate: SGST||GST Composition Scheme Tax Rate: Total|
|Manufacturers other than manufacturers of such goods as may be notified by the Government||0.5%||0.5%||1% of the Taxable Turnover (2% earlier)|
|Restaurants not supplying alcoholic liquor, Caterers, Canteen etc.,||2.50%||2.50%||5% of the Taxable Turnover|
|Other Eligible suppliers||0.5%||0.5%||1% of the Turnover of taxable supplies of goods|
Under the Composition scheme, the composition scheme GST rate will be applicable on the taxable supply within a state / Union Territory excluding inward reverse charge mechanism supplies and exempt supplies.
|Initially during the outbreak of GST Law (Original)||Increment from INR 75 lakhs to 1 Crore (Amendment No. 1)||Recommendation for increment from 1 crore to 1.5 Crores and amend the statutory limit to Rs. 2 Crore (Amendment No. 2)|
|The said limit of Rs.75 lakhs is defined in the GST Act itself with the provision that the same can be increased by the Government to an amount not exceeding Rs. 1 Crore based on the recommendation of the GST Council||GST Council vide its 22nd meeting held at New Delhi on 6th October, 2017 made the recommendation to stretch this limit from Rs. 75 lakhs to Rs. 1 crore, to ensure that maximum taxpayers having turnover below Rs. 1 crore opt for the composition scheme||In the 23rd GST Council Meeting held at Guwahati it was then decided to increase the threshold limit for determining aggregate turnover to Rs. 1.5 Crore from the previous amended limit of Rs. 1 Crore. It was also decided to amend the statutory cushioning to Rs. 2 Crore, meaning that, the limit of Rs. 1.5 Crore can be increased by the government, but not exceeding Rs. 2 Crore based on the recommendations of the Council.|
North Eastern States
The GST Council has decided that following Special Category States will have a Rs. 75 Lakhs turnover limit for Composition Levy for CGST and SGST purpose.
As part of GST composition scheme, taxpayers must:
Payment Declaration Form – GST PMT – 08: Definition, Format and Rules