Direct Tax Services
Audit
Consulting
ESG Advisory
RBI Services
SEBI Services
IRDA Registration
FEMA Advisory
Compliances
IBC Services
VCFO Services
Developed
Developing
BOTs
American
EU-1
EU-2
South East
South Asia
Gulf
ME
Select Your Location
We have covered the basic features, merits and demerits of Composition Scheme in our earlier articles. Now let’s discuss the rules for composition scheme under GST. These rules cover the topics of intimation procedure, effective date, conditions, restrictions, validity, and rate of tax regarding the composition scheme.
Table of Contents
If any taxpayer wishes to seek registration under section 10 of the Act, then he is required to give intimation about his intention to apply for registration under the scheme. For this purpose, taxpayers are divided into the following categories:
Registered under any old laws like VAT, CST, Service Tax etc. which are to be replaced by GST.
These taxpayers are required to file intimation in Form GST CMP-01, on the common portal either;
A taxpayer who was not covered under any of the old laws, but wish to seek registration under the GST and also wish to apply for registration under Composition Scheme, then the taxpayer can intimate by providing the information in Part-B of Form GST REG-01, the form for applying for registration under GST.
NOTE: Despite these rules specified initially, there have been many extensions granted by the GST Council. After the last such notification, the last date for availing the Composition Scheme benefit has been extended until 31st March 2018. This option can be availed by taxpayers who got fresh GST Registration as well as taxpayers who have migrated to GST from old tax laws.
They are required to file:
The pre-conditions of the composition scheme are as follows:
The validity of composition scheme depends upon various factors and conditions; let’s discuss them one by one:
If conditions are satisfied: If any registered taxable person who has opted for composition scheme and satisfied all the conditions laid thereon, then he is not required to file for fresh registration every year and his registration will remain valid.
If conditions are not satisfied: On the other hand if the conditions mentioned are not satisfied then he will be required to pay tax as a normal taxpayer. All the privileges will be withdrawn and he is required to issue tax invoices to all the registered customers. He will also be required to file intimation of such withdrawal in FORM GST CMP-04 within 7 days.
Voluntary Withdrawal: If any taxpayer[1] decides to withdraw from the scheme on his own, then he will be required to file an application for the same in FORM GST CMP-04.
If the officer has reasons to believe in ineligibility: In case proper officer is of the opinion that:
Then he should issue a notice to such registered person in FORM GST CMP-05 within 15 days. The registered person is required to submit his reply in FORM GST CMP-06. The proper officer shall issue his order in FORM GST CMP-07 within 30 days either accepting or denying it.
NOTE:
Whenever any order is passed in FORM GST CMP-07 regarding withdrawal from composition scheme, then the taxpayer is required to furnish a statement in FORM GST ITC-01 containing details of input stock as well as inputs held in semi-finished and finished goods. Such withdrawal can either be initiated by the taxpayer or by proper officer due to any contravention.
Such intimation is to be filed within 30 days of withdrawal from composition scheme.
The rules for composition scheme under GST have been targeted to be strict but crisp for person availing of the composition scheme. In case of any GST related query, contact Enterslice.
Read our article: An Abstract of GST on Joint Development Agreement (JDA)
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
The Reserve Bank of India, in its press release dated June 8, 2023, issued Statement on Develop...
RBI released a developmental and regulatory policy statement on June 8, 2023. The objective of...
Financial Institutions called Asset Reconstruction Companies ("ARCs") reconstruct and securitis...
Any person booked for an offence under the Criminal Procedure Code (CrPc) / the Code would be r...
The Reserve Bank of India regulates Non-Banking Financial Companies in India, and they are subj...
The Reserve Bank of India regulates Non-banking Financial Companies in accordance with the RBI...
Incorporation of a Limited Liability Company (LLC) is an attractive choice for small business o...
The Reserve Bank of India (the Bank) issued Non-Banking Financial Companies Acceptance of Publi...
A few years ago, investing in traditional investment categories like shares, bonds, real estate...
Compared to other organisations, the corporate governance of Non-Banking Financial Companies is...
Are you human?: 1 + 5 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
The 37th GST council meet was recently concluded in Goa under the chairmanship of Union Finance & Corporate aff...
21 Sep, 2019
GST registration is mandatory for persons whose turnover exceeds Rs. 40 lakhs & Rs. 10 lakhs for North Eastern...
29 Apr, 2021
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!