How to Get Registration under GST Composition Scheme : Ultimate Guide for Small Business Enterprises

Any person who wants to pay tax under GST composition Scheme is required to Apply for composition levy on GST Comman Portal.

For Dealers who migrated from VAT and Services Tax : Once after getting provision registration users have to apply within 30 days from the appointed date ( Date on which Act came into force ) in FORM GST CMP 01.

New Registration :  At the time of Filing new Registration Application user have to opt for payment of tax under Section 10 of CGST Act, 2017 , So Section 10 is required to be selected.

What is Composition Levy :

Composition Levy is an option provided to small business enterprises whose aggregate turnover in preceding financial year did not exceed fifty Lakh rupees may opt to pay tax at much lower rates of

-half percent (0.5%)  ,

-one percent in case manufacturer, and

2.5% in case of person engaged in supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

Who can apply for Composition Levy : 

Any Person who satisfies above conditions may opt for composition levy :

(a) he is neither a casual taxable person nor a non-resident taxable person;

(b) the goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State

(c) the goods held in stock by him have not been purchased from an unregistered person and where purchased, he pays the tax under sub-section (4) of section 9;

(d) he shall pay tax under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both received from un-registered persons;

(e) he was not engaged in the manufacture of goods as notified under clause (e) of sub-section (2) of section 10, during the preceding financial year;

(f) he shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him; and

(g) he shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.

(h) whose aggregate turnover in preceding financial year did not exceed fifty Lakh rupees

filing of Returns opting for composition Scheme : Under composition dealer is required to file quarterly and one Anuual Return.

Tax Under Composition Scheme :

Suppose you are a normal trader falling under tax slab of 0.5% than if your annual turnover is Rs. 40 lakh than you are required to pay Rs. 20000 as GST.

Intimation for composition levy :

Every year dealer is required to file fresh intimation on GST Comman Portal otherwise he has to pay tax as par normal provisions of the Act.

Place a Request for Online GST Support from Fastlegal Team Members :

2 thoughts on “How to Get Registration under GST Composition Scheme : Ultimate Guide for Small Business Enterprises

  1. I am a small trader (proprietorship) and also have some residential rental income (which is exempt from GST). The GSTIN for my trading business has the same PAN number which I use to file my personal income tax return (which includes income from trading business as well as rental income). Am I eligible to register my trading business under GST Composition Scheme?

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