Composition scheme

Composition Scheme
• Composition scheme under GST Law is for the small taxpayers.

• The objectives of composition scheme is to bring simplicity

and give small taxpayers so that they need not to be burdened
with the compliance provisions under GST

• The eligible person under GST can opt to pay a fixed

percentage of turnover as fees every quarter instead of paying
tax at normal rate.

• However, the taxable person in this case is not allowed to avail

the benefit of Input Tax credit
 Composition Levy
• A registered person, whose aggregate turnover in the
preceding financial year did not exceed a threshold limit may
opt for composition scheme and pay,

• in lieu of the normal tax payable by him , an amount

calculated at such rate as may be prescribed.
Threshold limit for Registration under
Composition scheme
(A) Threshold limit for registration under composition scheme-

Threshold limit for Registration under Composition Scheme has been

separately prescribed for:
• Supplier of Goods and Restaurant Services(Restaurant, mandap
keeper and outdoor caterer who make supplies, by way of or as part
of any service of goods, being food or any other article for human
consumption or any other drink other than alcoholic liquor for
human consumption)
 Supplier of services

Rs.1.5 crore

Rs.75 Lacs in case of

Special states
Manufactures and Traders opting
for Composition scheme :
• They can opt for composition scheme even if they supply
services, provided that the value of such services should not
exceed:

10% of turnover in the preceding financial year

OR

Rs.5,00,000

Whichever is HIGHER
Rates for Composition Levy for Supplier of
Goods and Restaurant Services

S.No. Particulars Rate

1. Manufacturers 1% (0.5% CGST+0.5% SGST)

2 Traders 1% (0.5% CGST+0.5% SGST)

3 Restaurants 5% (2.5% CGST+2.5% SGST)

(B) Threshold limit for Registration under composition scheme
for the supply of services-

The GST council has extended the scope for

applicability of composition scheme to the service
providers who have annual turnover of Rs.50,00,000 in
the preceding financial year.

Under this, the service providers shall be

liable to pay GST at the rate of 6%(3%
CGST+3% SGST)
 Aggregate Turnover

“ Aggregate Turnover” means the Aggregate Value of all-

I. Taxable supplies
II. Exempt supplies
III. Export of goods or service or both
IV. Inter-state supplies
of persons having the same PAN computed on all India basis.
Registered Persons
“ registered person” means a person who is registered under
section 25 of the CGST Act but does not include a person having
a UIN(Unique Identity Number)