06.03.2020, New Delhi
Applications for opting for Composition Scheme are open, several benefits for Small Taxpayers
Applications for opting in the GST Composition Scheme for the years 2020-21 have been opened. The existing registered taxpayers are required to apply for this scheme before 31st March 2020 on the GST portal. This scheme has been specially designed for the benefit of small Taxpayers. Under this scheme, the small taxpayers are provided with several relaxations with regard to maintenance of their accounts, filing of returns and payment of tax.
What is GST Composition Scheme?
Under the composition scheme, the taxpayers have been provided with the facility to pay their tax at a fixed rate in a consolidated manner and to file a single return for the whole year, a facility not provided to regular
taxpayers. The taxpayers whose aggregate annual turnover in the year 2019-20 was up to Rs. 1.5 crore can avail of this scheme. For the seven states of North East and Uttarakhand, this limit has been kept at Rs 75 lakh.
If any taxpayer is supplying services or goods along with services, the turnover limit for them has been kept at Rs 50 lakh throughout the country.
Benefits of Composition Scheme
Small taxpayers can avail several benefits under the GST Composition Scheme such as:
1. Consolidated tax at a fixed rate – Under the Composition Scheme, the taxpayers are not required to pay tax at different rates on their supplies. Instead, on their total supplies, they can pay tax at a fixed rate in a consolidated manner.
2. Tax payment on a quarterly basis – Instead of paying tax every month, the taxpayers are required to pay their tax only once in three months.
3. No obligation to file monthly returns- Whereas the normal taxpayer under GST is required to file their return either on a monthly or a quarterly basis, under Composition Scheme, they are required to file the return only once in a year.
4. Less book keeping- As such taxpayers are not required to maintain an account of ITC, there is no need for them to maintain elaborate accounts.