GST Composition Scheme-Criteria

 

Eligibility for availing Composition Levy Scheme:

The registered person shall be eligible to opt for the composition levy, if––

• he is not engaged in making any supply of goods, which are not leviable to tax under this Act;
• he is not engaged in making any inter-State outward supplies of goods;
• he is not engaged in making any supply of goods, through an electronic commerce operator who is required to collect tax at source;
• he is not a manufacturer of Ice Cream and other edible ice, Pan Masala and Tobacco and Tobacco substitutes.
• He is neither casual taxable person nor non-resident taxable person.

It is important to mention here that where more than one registered persons are having the same Permanent Account Number, the registered person shall not be eligible to opt for the composition scheme, unless all such registered persons opt to pay tax under the scheme.

The option availed of by a registered person under Composition Levy shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the notified threshold limits for such persons.

A taxable person, who exercises the option of composition levy, shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

Composition Scheme under GST

 Composition Scheme-Eligibility:

A registered person, whose aggregate turnover in the preceding financial year did not exceed Rupees 50 Lakhs (Fifty Lakh Rupees), may exercise the option to pay, in lieu of the tax payable by him, an amount calculated at the following rates:

Sl. No.	Category of Registered Persons	Rate of Tax (CGST+SGST)
1	Manufacturers, other than manufacturers of Ice Cream and other edible ice, Pan Masala and Tobacco and Tobacco substitutes.	2%
2	Supplier making supply, by way of or as part of any service or in any other manner, whatsoever, of goods being food or any other article for  human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or services is for cash, deferred payment or other valuable consideration.	5 %
3	Any other supplier	1 %

 The Government has by notification, increased the above said limit of Fifty Lakhs Rupees to One Crore Fifty Lakhs Rupees.

 

GST Taxable Activity - Supply under GST

 Supply Under GST:

SL. No.	BUSINESS ACTIVITY	GST LIABILITY
1	Sale, Transfer, Barter, Exchange, License, Rental, Lease or Disposal of goods	YES
2	Import of Services for a consideration: –	YES
A	In the course or furtherance of business	YES
B	For Personal Consumption	YES
3	Permanent transfer / disposal of business assets without consideration where ITC has been involved on such assets	YES
4	Supply between related person when made in the course or furtherance of business	YES
5	Supply between two units of same PAN number when made in the course or furtherance of business	YES
6	Supply of goods by a principal to his agent where agent undertakes to supply on behalf of the principal	YES
7	Transfer of right in goods or of undivided share in goods without transfer of title thereof	YES
8	Any treatment or process which is being applied to another person’s goods Change in usage of goods – from business to private use, whether or not for a consideration	YES
9	Renting of immovable property	YES
10	Construction of civil structure where part of whole of the consideration is received before issuance of completion certificate.	YES
11	Work contract transaction	YES
12	Transfer of the right to use any goods for any purposes	YES
13	Supply of goods by any unincorporated association or body of person to a member thereof.	YES