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.