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The GST composition scheme has been introduced to minimize the compliance burden for small taxpayers. Small business owners have to focus on business instead of compliance; hence they may not be able to comply with the GST laws as a regular taxpayer. It is expected that the composition scheme will help SMEs and will ensure ease of doing business in India.
Irrespective of the above mentioned numerous restrictions, Composition Scheme offers a lot of benefits to the taxpayer.
Following are the benefits of the composition scheme and this is the reason we recommend that SME[1] should register themselves under GST Composition scheme.
Thus, if you see in the above example, a taxpayer registered under the composition scheme and consumable goods to the consumer at a similar price is earning a higher profit and his tax liability is also lower.
Read our article:What is Composition Scheme Under GST Law
The composition supplier working under B2B Business model would not be able to pass the input received on the purchase of goods. He cannot raise a tax invoice and hence the GST cannot be collected from the purchaser. The composition scheme for B2B business would make them non-competitive. However, the composition scheme can be a good option for small details and would be right fit where there is a purchase from composition dealer and a sale to an end consumer.
It can be concluded that the composition scheme has a prospect of being the growth driver for small taxpayers who carry intrastate transactions.
Do you wish to register for GST? Or are you looking for a GST Implementation advisory? Would you like to know about the GST impact on your industry under GST? Please feel free to contact Enterslice, India’s leading online legal and tax advisory firm.
Read our article: Composition scheme under GST & Presumptive Taxation Scheme READ How to Apply For GST Registration in Mumbai
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