Small businesses having an annual turnover less than Rs. 1.5 crore* ( Rs. 75 Lakhs for NE States) can opt for Composition scheme.

Small businesses having an annual turnover less than Rs. 1.5 crore* ( Rs. 75 Lakhs for NE States) can opt for Composition scheme.

Composition dealers will pay 1% or 5% tax rates based on the type of business:

Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers). They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket. Businesses that have opted for Composition Scheme cannot claim any input tax credit.

Composition scheme is not applicable to :

Service providers

Inter-state sellers

E-commerce sellers

Supplier of non-taxable goods

Manufacturer of Notified Goods

This scheme is a lucrative option for all SMEs who want lower compliance and lower rates of taxes under GST. A GST taxpayer whose turnover is below Rs 1.5 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the present limit is Rs 75* lakh.

Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

Learn the Rules about Composition scheme & Know the pros & cons of being a composition dealer.

Obtain GST registration and file CMP-02 to opt in for the scheme.