FAQ – (General Queries Asked By Taxpayers related to Composition Scheme)
Q1. How to Opt Composition Scheme in GST?
If you are a regular taxpayer with an aggregate annual domestic PAN-based turnover as defined from time to time, you can opt for the Composition Levy under GST.
But, You can’t opt for the Composition Levy if you make:
- Any goods supplied that are not liable for taxation under this Act,
- Inter-state outward supplies of goods,
- Supplies by e-commerce operators who are allowed under section 52 to collect the tax,
- Notified goods manufacturer,
- Casual dealer,
- Non-Resident Foreign Taxpayer,
- A person registered as ISD (Input Service Distributor),
- A person registered as TDS Deductor/Tax Collector.
Q2. How to apply for Composition Scheme in the case of the already registered regular taxpayer?
Perform the following steps on the GST portal to opt for the Composition Levy:
- Log in to the GST Portal,
- Then, Go to Services > Registration > Then click on the Application to Opt for Composition Levy,
- Complete the form according to the rules of the form specification and submit.
Q3. How to convert from regular to composition scheme under GST?
Any taxpayer registered under GST as a normal taxpayer must file an application with the GST Portal to opt for a Composition Levy in Form GST-CMP-02, prior to the beginning of the financial year for which the option to pay tax is exercised in accordance with the above section.
Q4. When the taxpayer can opt for Composition Levy?
To avail of this scheme, you need to file an online application to Opt for Composition Levy with the tax authorities. Taxpayers who can opt-in this scheme are categorized under as below:
New Taxpayers: Any person who becomes liable for registration under the GST Act must file an option to pay the amount of the composition in the Application for New Registration in Form GST REG-01 after the appointed date.
Existing Taxpayers: Any taxpayer registered under GST as a normal taxpayer must file an application with the GST Portal to opt for a Composition Levy in Form GST-CMP-02 prior to the beginning of the financial year for which the option to pay tax is exercised in accordance with the above section.
Q5. A registered taxpayer availing the composition scheme under GST. Do the taxpayer need to file a new application to opt for the composition scheme?
There is no requirement for those taxpayers, who already in the composition scheme. To file new applications opting for the composition scheme, subject to compliance with the relevant conditions/ restrictions in this regard.
Q6. Is it possible to save the Application to Opt for Composition Levy?
Yes, it is possible to save the application for up to 15 days from the date of initiation, after which the system purges it.
You can access Saved Applications using the My Saved Applications feature available in the Taxpayers’ Interface.
Q7. Can I opt for Composition Levy, if I have dealt in services?
Yes, you can opt for the Composition Levy from FY 2019-20 onwards, even if you have dealt with services.
Q8. What are the returns to be filed by the taxpayer under a Composition scheme?
The composition taxpayer must pay tax and furnish a statement in FORM GST CMP-08, every quarter or part of it, as the case may be.
And further, in FORM GSTR-4, he has to provide a return for each financial year or part thereof, as the case may be.
Hope, all your queries related to how to opt Composition Scheme? or Can you opt composition scheme or not? and many more queries has been solved. If you still have any doubt related to composition scheme you can ask by commenting below.
Disclaimer – Author has exercised utmost care while writing this article, but still this article may contain some error or mistake and no part of this article/writing should be construed or considered as any advice or consultancy whether professional or otherwise. The contents of this article are solely for information and knowledge.
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About the Author:
Ankit is a Chartered Accountant based in Delhi and the founder of ADA & Co. He has over 7 years of work experience, specializing in the field of taxation (Direct & Indirect) practice. He also has knowledge in the full range of financial services including Business, Taxation, Audit and Account. Further, he has managed assignments in respect of GST Audits, Bank Audits, Stock Audits, PSUs Audits, AR & AP Reconciliation etc and represented clients in tax litigative matters before Indian tax authorities. The aim of this article is to enable the professionals in the industry and students & businessmen to be aware with current developments in the Direct and Indirect tax laws and Accounting Practices.