Now Let's revise composition scheme so Section 10 deals with composition scheme.
A
person can opt for composition scheme to enjoy a lower rate of GST on his outward
supply. But the disadvantage is he will not get ITC on his purchases. The moment he
does not get ITC on his purchases, the tax paid on purchase becomes a cost, plus
the tax on outward supply that is lower rate has to be paid from his pocket, so
that also becomes a cost to him. He can file return only once in a year, and the
due date for gstr Four is 30th April after the financial year, he can pay taxes on
quarterly basis by filing a form called as CMP 08 due date is 18th after each
quarter. Then we discuss about persons who are eligible for composition scheme, any
person whose aggregate turnover in preceding financial year, does not exceed 1.5
crore is eligible for composition scheme. Now, when we talk about composition
scheme, you need to remember that it is 75 lakh for eight states, mdnm, masu
Manipur, Tripura, Nagaland, Mizoram and masu Meghalaya, Arunachal Pradesh, Sikkim
Bucha, then aggregate turnover includes taxable supply, exempt supply, interstate
supply, export of goods or services, but does not include GST and inward supply
under reverse Charge mechanism. It includes all the transactions carried out by all
the branches under a single pan, because it talks about aggregate turnover, any non
taxable supply will also form part of aggregate turnover, but only one benefit is
given, that is interest earned on loans, deposit advances will not form part of
aggregate turnover or turnover anywhere in composition scheme, then we speak about
a particular discussion with regard to persons not eligible for composition scheme.
If a person is carrying out interstate supply, outward supply, then he is not
eligible for composition scheme. Then a person who is a non resident, taxable
person or cashier, taxable person. A person who is making supplies of non taxable
goods or services is also not eligible. A person supplying services through E
commerce operator required to collect tax under Section 52 that is, TCS careful
earlier goods was also mentioned here, but now goods is related. That means good
suppliers through E commerce operator can opt for composition scheme, then
manufacturer of specified products, Pan masala, tobacco, ice cream, aerated water,
bricks and tiles. Bricks and tiles, building bricks, fly ash bricks, bricks of
fossil meals, earthen or roofing tiles. All these are excluded. But remember,
manufacturer of these products cannot take composition scheme, then a person
providing services more than the permissible limit. How much is the permissible
limit? 10% of preceding financial year turnover in a state, or five lakh, whichever
is higher, that much service being provided. No problem. Beyond that, we'll have to
shift to regular scheme. Then. Then we speak about the GST rates, which are
applicable for Section 10 one and 10 two, that is manufacturer and trader and
restaurant service provider. The rate is defined separately 10 to a which only
deals with services, which has a limit of 50 lakh in the preceding financial year,
then you can take the benefit up to 50 lakh in the current financial year. There
the rate is different. So 10, one and 10, two, manufacturer point 5.5, of turnover
in a state trader, point 5.5 taxable turnover in a state restaurant, 2.5 2.5
turnover in a state and tend to a three plus three of turnover in a state only a
trader gets an advantage because He pays only on taxable turnover and not on
anything else. So be careful about this particular point, plus all the supplies
made during the financial year will be counted in aggregate turnover, though you
will not pay the tax on the first 20 lakh if you are not registered or you have not
opted for composition scheme. So. But up to your registration limit, that turnover
will also be counted for 50 lakh or 1.5 crore or 75 lakh, but you don't have to pay
tax on that. Be careful about this particular point. Then we speak about some
miscellaneous points, interest on loans, deposits, advances will not form part of
turnover for the purpose of composition scheme, they will issue a bill of supply
and not a tax invoice, because they cannot collect tax. If a person shifts from
composition to regular scheme, he has to give the stock statement within 30 days
from the date of shift regular to composition scheme, 60 days time for giving
details of stock composition to regular. Three cases are there? One say, suppose
your aggregator turnover in the current year exceeds the specified limit. Second,
any condition violated. Third, voluntarily opts out of composition scheme that's
any time permitted. Then we speak about the final leg of the transaction, and that
is
the total
composition scheme is subject to a condition that ITC is not available, so tax paid
on purchase will become a
cost. So.
Transcribed by https://otter.ai
