You should know if the turnover of your business is not greater than INR 1.5 Crores
The composition scheme of tax payment is meant for those small businesses whose turnover of taxable goods is not greater than INR 1.5 Crores. In such cases, the burden of GST must be borne by the seller. The rates are as follows:
It is worth mentioning here that the composition taxpayer cannot issue a tax invoice. The reason being the burden of tax must be borne by the dealer out of pocket. Consequently, A composition Dealer is not allowed to take back the GST from the customers. In the past Service Providers could not opt for Composition Scheme
The Composition Scheme is very supportive for small businesses. As compared to the regular GST scheme, the taxpayers opting for the Composition scheme are required to file a total of 5 GST Returns:
Composite scheme holders cannot claim the Input Tax Credit
A Registered Person, whose aggregate turnover in the preceding financial year was not more than Seventy-Five (75L) Lakh Rupees for specified states can opt for this scheme. Other than the restaurant sector, The taxpayers related to the Service industry can also choose this scheme. It has multiple tax rates including 5%, 12%, 18% and 28%.
Regular taxpayers can get back input tax credit of GST that is paid on the purchase of goods or services or both.
For opting into a composition scheme, taxpayers are required to file CMP-02. The scheme will be effective from 01/04/2020
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For traders and manufacturing both rate is 1 %
A person who deals only in service
What would be the turnover limit for him to opt for the regular scheme
same as applicable for normal taxpayer