{"id":11727,"date":"2020-07-18T21:26:01","date_gmt":"2020-07-18T15:56:01","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=11727"},"modified":"2023-03-17T18:42:39","modified_gmt":"2023-03-17T13:12:39","slug":"composition-scheme-under-gst-act","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/","title":{"rendered":"Composition Scheme under GST Act: A Guide on its Key Reforms"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Although the implementation of <strong>GST (Goods and Service Tax) in India<\/strong> was a significant change from the prevailing tax regime. However, it was a back-breaking task for the start-ups or SMEs to comply with its provisions. Therefore, to lower down the stress of these sectors government decided to introduce the <strong>Composition Scheme under GST Act<\/strong>. <\/p>\n\n\n\n<p>Further, this blog will discuss the concept, eligibility, updates,  tax rates, reforms, process, and annual returns under Composition Scheme.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3030e592191\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3030e592191\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Concept_of_GST_Composition_Scheme\" title=\"Concept of GST Composition Scheme\">Concept of GST Composition Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Eligibility_for_Composition_Scheme_under_GST_Act\" title=\"Eligibility for Composition Scheme\nunder GST Act\">Eligibility for Composition Scheme\nunder GST Act<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Persons_not_Eligible_to_Apply_for_Composition_Scheme_under_GST_Act\" title=\"Persons not Eligible to Apply\nfor Composition Scheme under GST Act\">Persons not Eligible to Apply\nfor Composition Scheme under GST Act<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Key_Aspects_of_GST_Composition_Scheme\" title=\"Key Aspects of GST Composition\nScheme\">Key Aspects of GST Composition\nScheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Benefits_of_Composition_Scheme\" title=\"Benefits of Composition\nScheme\">Benefits of Composition\nScheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Conditions_for_Availing_Composition_Scheme\" title=\"Conditions for Availing Composition Scheme \">Conditions for Availing Composition Scheme <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Modes_of_Making_GST_Payment_by_the_Composition_Dealer\" title=\"Modes of Making GST Payment by the Composition Dealer\">Modes of Making GST Payment by the Composition Dealer<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Different_Forms_for_the_GST_Composition_Scheme\" title=\"Different\nForms for the GST Composition Scheme\">Different\nForms for the GST Composition Scheme<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Filing_of_Return_under_the_Composition_Scheme\" title=\"Filing of Return under the Composition Scheme\">Filing of Return under the Composition Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Billing_under_GST_Composition_Scheme\" title=\"Billing under GST Composition Scheme\">Billing under GST Composition Scheme<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Latest_Updates_on_the_Composition_Scheme_under_GST_Act\" title=\"Latest Updates on the Composition Scheme under GST Act\">Latest Updates on the Composition Scheme under GST Act<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Online_Procedure_to_Apply_for_Composition_Scheme_under_GST_Act\" title=\"Online Procedure to Apply for Composition Scheme under GST\nAct\">Online Procedure to Apply for Composition Scheme under GST\nAct<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/composition-scheme-under-gst-act\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_GST_Composition_Scheme\"><\/span>Concept of GST Composition Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong>GST Composition Scheme acts<\/strong><a href=\"https:\/\/cbic-gst.gov.in\/pdf\/faq-manual\/faq-composition-levy-revised.pdf\">[1]<\/a>  as an alternative way of paying taxes for small taxpayers. This method aims to simplify the process and reduce the compliance cost for these taxpayers. &nbsp;Further, <strong><em>section 10<\/em><\/strong> governs the <strong>Composition Scheme under GST Act<\/strong>.<\/p>\n\n\n\n<p>Furthermore, if we <strong>compare the composition scheme<\/strong> and normal GST Filing, the scheme offers two benefits. First, the <strong><em>lower tax liability<\/em><\/strong> and second the <strong><em>reduced paperwork<\/em><\/strong>.<\/p>\n\n\n\n<p>Moreover, under this scheme, the\ntaxpayer is liable to pay tax at a fixed rate, i.e., <strong><em>1% to 6%<\/em><\/strong> of\nthe annual turnover.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_for_Composition_Scheme_under_GST_Act\"><\/span>Eligibility for Composition Scheme\nunder GST Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All those taxpayers whose annual turnover is up to <strong><em>Rs 1.5 crore<\/em><\/strong> can choose to register under the Composition Scheme. However, the limit for <strong><em>Himachal Pradesh<\/em><\/strong> and the <strong><em>North-Eastern States<\/em><\/strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Northeast_India\">[2]<\/a>  has been reduced to <strong><em>Rs 75 lakh<\/em><\/strong>.<\/p>\n\n\n\n<p>Further, by choosing this scheme, the small taxpayers will get relief from the tedious and back-breaking formalities concerning GST. Under this scheme, they need to pay tax at a fixed rate of annual turnover. &nbsp;<\/p>\n\n\n\n<p>Furthermore, the <strong><em>CBIC (Central Board of Indirect Taxes\nand Customs)<\/em><\/strong> has increased the annual turnover limit from <strong><em>Rs 1\ncrore to Rs 1.5 crore<\/em><\/strong>. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Persons_not_Eligible_to_Apply_for_Composition_Scheme_under_GST_Act\"><\/span>Persons not Eligible to Apply\nfor Composition Scheme under GST Act<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The taxable <strong>persons not eligible to apply for composition scheme under GST<\/strong> Act are as follows:<\/p>\n\n\n\n<ol><li>Supplier\nof service other than restaurant owners<\/li><li>NRI\n(Non-Resident of India) taxable person;<\/li><li>Supplier\nof Non-Taxable Goods;<\/li><li>A Person\nengaged in the Inter-State Supplies;<\/li><li>A Supplier\nwho is supplying goods through E-commerce operator;<\/li><li>Manufacturer\nof ice-cream, tobacco, and pan masala;<\/li><li>Casual\nTaxable Person.<\/li><\/ol>\n\n\n\n<p><strong>Note: <\/strong><strong><\/strong><\/p>\n\n\n\n<ol><li>Earlier, the service providers, other than the one engaged in restaurant services, did not have the permission to get registered under the composition scheme. However, after the <strong><em>32<sup>nd<\/sup> GST Council Meeting, held in January 2019<\/em><\/strong><a href=\"http:\/\/gstcouncil.gov.in\/32nd-gst-council-meeting\">[3]<\/a> , these sectors were allowed to register under the Composition Scheme.<\/li><li>The entities or individuals registered under the Composition Scheme are not allowed to engage in the interstate supply. However, these businesses can acquire goods and services from suppliers eligible to perform interstate functions under the GST Act.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Aspects_of_GST_Composition_Scheme\"><\/span>Key Aspects of GST Composition\nScheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>The <\/em><strong><em>key aspects of the Composition Scheme under GST<\/em><\/strong><em> Act are as follows:<\/em><\/p>\n\n\n\n<ol><li><strong>Eligibility<\/strong>: Only the taxpayers having Rs 1.5 crore as the annual turnover can apply for registration under the GST Composition Scheme. <\/li><li><strong>Special Eligibility Criterion<\/strong>: The GST Council has allowed the normal taxpayers to apply for Composition Scheme Registration. However, these taxpayers are permitted only if they have 10% of the turnover from providing services.<\/li><li><strong>Filing of Quarterly Returns<\/strong>: A taxable person registered under the composition scheme needs to file only one return every quarter. <\/li><li><strong>Intra-state Supplies<\/strong>: Inter-state suppliers or local suppliers can acquire <strong><em>benefits under the GST Composition Scheme<\/em><\/strong>.<\/li><li><strong>Bill of Supply<\/strong>: A taxable person registered under the GST Composition Scheme needs to show a bill of supply instead of a tax invoice to the authorities. <\/li><li><strong>No Input Tax Credit<\/strong>: As per section 16 of the GST Act, the goods and services on which the composition tax has already been paid are not eligible to claim ITC. <\/li><li><strong>Tax Rates<\/strong>: The tax rates for the Composition Scheme under the GST Act are as follows:<\/li><li><strong>Manufacturers<\/strong>: 1% GST (0.5% CGST and 0.5% SGST);<\/li><li><strong>Restaurant Services (that do not serve alcohol)<\/strong>: 5% GST (2.5% CGST and 2.5% SGST);<ul><li>Service Providers: 6% GST (3% CGST and 3% SGST);<\/li><li>All Other Traders: 1% GST (0.5 CGST and 0.5% SGST)<\/li><\/ul><\/li><li><strong>GST applicable only on Taxable Supplies<\/strong>: After the amendment made on 01 Jan 2018, GST will be applicable only for taxable supplies. That means earlier, there was a need to pay taxes for exempted goods as well.<\/li><li><strong>Penal Provisions<\/strong>: Section 73 and 74 of the GST Act deals with the offense of providing false data under the scheme.<\/li><li><strong>Voluntary Registrations<\/strong>: Taxpayers registered under the VAT (Value Added Tax) composition scheme need to apply under the GST Composition Scheme.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_Composition_Scheme\"><\/span>Benefits of Composition\nScheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In India, the <strong>benefits of the Composition Scheme under GST<\/strong> Act are as follows:<\/p>\n\n\n\n<ol><li>Limited\nCompliances for Small Taxpayers;<\/li><li>Timely\nRecovery of Taxes;<\/li><li>Limited\nTax Liability;<\/li><li>High\nLiquidity for Taxpayers;<\/li><li>Quick\nfiling of Returns;<\/li><li>Easy\nmaintenance and generation of records;<\/li><li>Simplified\ninvoices and other documents.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_for_Availing_Composition_Scheme\"><\/span>Conditions for Availing Composition Scheme <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>In India, the <\/em><strong><em>conditions for availing composition scheme under GST<\/em><\/strong><em> Act are as follows:<\/em><\/p>\n\n\n\n<ol><li>Any dealer choosing Composition Scheme cannot claim <strong><em>ITC (Input Tax Credit)<\/em><\/strong>;<\/li><li>A dealer cannot supply <strong><em>GST Exempted Goods<\/em><\/strong>;<\/li><li>A dealer cannot engage in <em><strong>Inter-state supply<\/strong><\/em>;<\/li><li>The taxpayer needs to pay tax at a nominal rate under the <strong><em>RCM (Reverse Charge Mechanism)<\/em><\/strong>;<\/li><li>A person involved in several businesses like textiles, groceries, accessories, etc. with the same, then he\/she needs to opt for the GST Composition Scheme collectively;<\/li><li>Every taxpayer registered under the Composite Taxable Person needs to mention \u201c<strong><em>Composition Taxable Person<\/em><\/strong>\u201d on every supply bill that he\/she issues; <\/li><li>Further, the taxpayer needs to specify \u201c<strong><em>Composition Taxable Person<\/em><\/strong>\u201d on every notice and signboard at the business site.<\/li><li>Since, <strong><em>01 Feb 2019<\/em><\/strong>, a Manufacturer or Trader can supply services or goods up to <strong><em>10% of the annual turnover, or Rs 5 Lakhs<\/em><\/strong>, whichever is higher. <\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Modes_of_Making_GST_Payment_by_the_Composition_Dealer\"><\/span>Modes of Making GST Payment by the Composition Dealer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>The different modes of making GST payment by the Composition Dealer are as follows:<\/em><\/p>\n\n\n\n<ol><li>GST\non supplies made;<\/li><li>Tax\non Reverse Charge;<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Different_Forms_for_the_GST_Composition_Scheme\"><\/span>Different\nForms for the GST Composition Scheme<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><em>The <\/em><strong><em>different forms for the GST Composition Scheme<\/em><\/strong><em> can be summarised as:<\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme-1024x1024.png\" alt=\"Forms for the GST Composition Scheme\" class=\"wp-image-11729\" width=\"452\" height=\"452\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme-1024x1024.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme-768x768.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Different-Forms-for-the-GST-Composition-Scheme.png 1200w\" sizes=\"(max-width: 452px) 100vw, 452px\" \/><\/figure><\/div>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Form No<\/strong>\n  <\/td><td>\n  <strong>Particulars<\/strong>\n  <\/td><td>\n  <strong>Due Date<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>GST CMP-01<\/strong>\n  <\/td><td>To opt into Composition Scheme by Provisional <strong><a href=\"https:\/\/swaritadvisors.com\/gst-registration\">GST Registration<\/a><\/strong> Holder.   <\/td><td>Within 30 days from the   date of appointment   <\/td><\/tr><tr><td>\n  <strong>GST CMP-02<\/strong>\n  <\/td><td>To opt into GST Composition Scheme by the unregistered persons.   <\/td><td>Before the Commencement of Financial Year.   <\/td><\/tr><tr><td>\n  <strong>GST CMP-03<\/strong>\n  <\/td><td>Information regarding the stock\/ inward supply from the unregistered person\/ business.   <\/td><td>Within 90 days from the date of exercising the option.   <\/td><\/tr><tr><td>\n  <strong>GST CMP-04<\/strong>\n  <\/td><td>Application for the withdrawal from the GST Composition Scheme.   <\/td><td>Within seven days from   the date of the happening of the event   <\/td><\/tr><tr><td>\n  <strong>GST CMP-05<\/strong>\n  <\/td><td>Issuance of Show Cause Notice by the Proper Officer&nbsp;    <\/td><td>On any contravention   <\/td><\/tr><tr><td>\n  <strong>GST CMP-06<\/strong>\n  <\/td><td>Reply to the Show Cause notice issued by the proper officer   <\/td><td>Within 15 days from the receipt of notice   <\/td><\/tr><tr><td>\n  <strong>GST CMP-07<\/strong>\n  <\/td><td>Order for the Acceptance or Rejection of the Reply filed to the Proper Officer.   <\/td><td>Within 30 days from the   filing of the notice   <\/td><\/tr><tr><td>\n  <strong>GST REG-01<\/strong>\n  <\/td><td>Registration under the GST Composition Scheme   <\/td><td>Before the appointed date   <\/td><\/tr><tr><td>\n  <strong>GST ITC-01<\/strong>\n  <\/td><td>Details regarding the semi-finished, finished and stocks   <\/td><td>Within 30 days of the withdrawal   from the GST Composition Scheme   <\/td><\/tr><tr><td>\n  <strong>GST ITC-03<\/strong>\n  <\/td><td>Intimation about the <strong><a href=\"https:\/\/swaritadvisors.com\/learning\/input-tax-credit-under-gst-guide-on-itc-claim\/\">Input Tax Credit<\/a><\/strong>   <\/td><td>Within 60 days from the beginning of the Financial Year.   <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_of_Return_under_the_Composition_Scheme\"><\/span>Filing of Return under the Composition Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>&nbsp;The <\/em><strong><em>returns to be filed under the GST Composition Scheme<\/em><\/strong><em> are as follows:<\/em><\/p>\n\n\n\n<ol><li><strong>Form GSTR-4<\/strong>: It is a Quarterly Return and needs to be filed by the 18th of the month after quarter-end.<\/li><li><strong>Form GSTR-9A<\/strong>: It is an Annual Return and needs to file by the 31<sup>st<\/sup> of the respective financial year.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Billing_under_GST_Composition_Scheme\"><\/span>Billing under GST Composition Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>As per the rules and regulations of the composition scheme under the GST Act, a composition dealer cannot issue a&nbsp;GST (Goods and Service Tax). The reason behind this is that in this case, the tax liability is on the taxpayer.<\/li><li>It is obligatory for a composition dealer to issue a bill of supply as per the rules and regulations of the composition scheme under GST Act. <\/li><li>Further, it is compulsory to mention \u201c<strong><em>composition taxable person<\/em><\/strong>, ineligible to receive tax on supplies\u201d on every bill issued.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Latest_Updates_on_the_Composition_Scheme_under_GST_Act\"><\/span>Latest Updates on the Composition Scheme under GST Act<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Some\nof the latest updates on the Composition Scheme under GST Act are as follows: <\/p>\n\n\n\n<ol><li>The\ntime period for filing Form <strong><em>GST ITC-03<\/em><\/strong> has been extended till <strong><em>31\nJuly 2020<\/em><\/strong>;<\/li><li>The\ntime period for submitting Form <strong><em>GSTR-4<\/em><\/strong> by the composition dealers\nfor the financial year <strong><em>2019-2020<\/em><\/strong> was extended till <strong><em>31 August\n2020<\/em><\/strong>;<\/li><li>All\nthe dealers were allowed to make <strong><em>Challan-cum-Statement<\/em><\/strong> for the <strong><em>January\nto March<\/em><\/strong> Quarter in <strong><em>Form GST CMP-8<\/em><\/strong> till <strong><em>07 July\n2020<\/em><\/strong>;<\/li><li>The\ntime-limit for the normal as well as registered taxpayers who want to apply in\ncomposition scheme for the Financial Year 2020-2021 was extended till <strong><em>30\nJune 2020<\/em><\/strong>;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Online_Procedure_to_Apply_for_Composition_Scheme_under_GST_Act\"><\/span>Online Procedure to Apply for Composition Scheme under GST\nAct<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The steps involved in the <strong>procedure to apply for the Composition Scheme under GST Act<\/strong> are as follows:<\/p>\n\n\n\n<ul><li><strong>Visit Official Portal<\/strong>: The first and foremost step for the applicant is to visit the official GST portal on <a href=\"https:\/\/www.gst.gov.in\/\">https:\/\/www.gst.gov.in\/<\/a><strong>;<\/strong><\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"523\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-215-1024x523.png\" alt=\"FIle composition scheme step-1\" class=\"wp-image-11730\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-215-1024x523.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-215-300x153.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-215-768x392.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-215.png 1366w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Services<\/strong>: Now, the Applicant needs to click on the <strong><em>\u201cService\u201d<\/em><\/strong> tab on the homepage. Further, this application procedure includes two parts;<ul><li><strong>New Registration;<\/strong><\/li><li><strong>TRN (Temporary Reference Number)<\/strong>  <\/li><\/ul><\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"468\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-216-1024x468.png\" alt=\"file composition scheme step-2\" class=\"wp-image-11731\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-216-1024x468.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-216-300x137.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-216-768x351.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-216.png 1366w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption><br><\/figcaption><\/figure><\/div>\n\n\n\n<ul><li><strong>New Registration<\/strong>: Now, the applicant needs to choose <strong><em>\u201cNew Registration\u201d<\/em><\/strong>;<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"528\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-217-1024x528.png\" alt=\"file composition scheme step-3\" class=\"wp-image-11732\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-217-1024x528.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-217-300x155.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-217-768x396.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-217.png 1366w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Details<\/strong>: The applicant needs to fill in the following details;<ul><li>Type of Taxpayer;<\/li><li>District and State for which the Composition Scheme registration is needed;<\/li><li>Business Name;<\/li><li>PAN Card particulars of the Business or Proprietor;<\/li><li>Mobile Number and E-mail Address of the Primary Authorised Signatory;<\/li><\/ul><\/li><li><strong>One Time Password<\/strong>: The applicant needs to enter the OTP received on the registered e-mail address and mobile number;<\/li><li><strong>Enter OTP<\/strong>: The applicant needs to enter the given OTP and Captcha. Thereafter click on the \u201cProceed\u201d button;<\/li><li> <strong>Login on GST Portal<\/strong>: Now, enter the provided username and password, together with the Captcha in the required place and thereafter click on the \u201cLogin\u201d option; <\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"647\" height=\"427\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-218.png\" alt=\"file composition scheme step-4\" class=\"wp-image-11734\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-218.png 647w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-218-300x198.png 300w\" sizes=\"(max-width: 647px) 100vw, 647px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Application for Composition Scheme under GST Act<\/strong>: When the applicant has logged on to the account, then he\/she needs to select \u201cApplication to opt for Composition Scheme under GST Act\u201d. The applicant can select the same from the <strong><em>\u201cRegistration Menu\u201d<\/em><\/strong> provided under the <strong><em>\u201cService\u201d<\/em><\/strong> tab on the home page.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"671\" height=\"372\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-219.png\" alt=\"file composition scheme step-5\" class=\"wp-image-11735\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-219.png 671w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-219-300x166.png 300w\" sizes=\"(max-width: 671px) 100vw, 671px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Review Details Provided<\/strong>: After selecting the applicant will be redirected to the application page. Here the following details of the applicant will be listed on the form:<ul><li>GSTIN (Goods and Service Tax Identification Number);<\/li><li>Business Name;<\/li><li>Trade Name;<\/li><li>Address of the Registered Office;<\/li><li>Nature of the Business;<\/li><li>Jurisdiction.<\/li><\/ul><\/li><li><strong>Composition Declaration<\/strong>: Further, after reviewing all the information provided, the applicant needs to tick the Composition Declaration Box given at the end of the application form.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"659\" height=\"70\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-220.png\" alt=\"Composition Declaration\" class=\"wp-image-11738\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-220.png 659w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-220-300x32.png 300w\" sizes=\"(max-width: 659px) 100vw, 659px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Verification Process<\/strong>: Now, after ticking the composition declaration, the applicant needs to check the box of the Verification Process. This box is given just below the Composition Declaration. <\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"678\" height=\"99\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-221-1.png\" alt=\"Composition verification process\" class=\"wp-image-11739\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-221-1.png 678w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-221-1-300x44.png 300w\" sizes=\"(max-width: 678px) 100vw, 678px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Other Details<\/strong>: After Verification, choose the Authorised Signatory from the drop-down menu and also mention the place of filing the application. Now, click on the <strong><em>\u201cSave\u201d<\/em><\/strong> button to save the details provided.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"685\" height=\"362\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222.png\" alt=\"Composition Declaration other details\" class=\"wp-image-11740\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222.png 685w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222-300x159.png 300w\" sizes=\"(max-width: 685px) 100vw, 685px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Submit the Application Form<\/strong>: After saving the said form, the <em><strong>\u201cSubmit\u201d<\/strong><\/em> option gets activated. Further, the Applicant requires to sign the application form. He\/she can either sign it by using DSC (Digital Signature Certificate) or by EVC option. <\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"685\" height=\"68\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222-1.png\" alt=\"Composition submit application\" class=\"wp-image-11743\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222-1.png 685w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-222-1-300x30.png 300w\" sizes=\"(max-width: 685px) 100vw, 685px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Submit Form after Signing<\/strong>: Lastly, click on the <strong><em>\u201cSubmit\u201d<\/em><\/strong> option after signing the form.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"690\" height=\"144\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-223.png\" alt=\"Composition for submission\" class=\"wp-image-11741\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-223.png 690w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/07\/Screenshot-223-300x63.png 300w\" sizes=\"(max-width: 690px) 100vw, 690px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The main reason behind the implementation of the Composition Scheme under GST Act was to provide an alternative or optional way to the small taxpayers. Further, this scheme aims to reduce the tax burden and compliance cost on these taxpayers. <\/p>\n\n\n\n<p>Moreover, this scheme has simplified the lives of small taxpayers, as now they are not required to maintain lots of records. Therefore, it will be correct to mention that the composition scheme under GST Act has turned out very beneficial for small taxpayers. <\/p>\n\n\n\n<p>However, GST Registration and <strong><a href=\"https:\/\/swaritadvisors.com\/gst-return-filing\">GST Return Filing<\/a><\/strong> is an extensive process that is efficiently and smoothly handled by the experts at Swarit Advisors. Take the assistance of our experts who are coherent in dealing with GST registration. <\/p>\n\n\n\n<p class=\"text-left\"><b>Also, Read<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/swaritadvisors.com\/learning\/gst-registration-requirement\/\">GST Registration Requirement<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although the implementation of GST (Goods and Service Tax) in India was a significant change from the prevailing tax regime. However, it was a back-breaking task for the start-ups or SMEs to comply with its provisions. Therefore, to lower down the stress of these sectors government decided to introduce the Composition Scheme under GST Act. [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":11747,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[791,792,790,793],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11727"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=11727"}],"version-history":[{"count":12,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11727\/revisions"}],"predecessor-version":[{"id":19077,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/11727\/revisions\/19077"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/11747"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=11727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=11727"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=11727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}