Government reopens window for composition scheme

GSTN said – “To make this facility available to all those who could not opt for Composition, the facility has been opened again”. And further added “For the period prior to October 1, the taxpayers will be treated as a normal taxpayer and will have to file monthly return for the period till September 30, 2017”

• The GST Network (GSTN) announced the reopening of the facility for small taxpayers with a turnover of up to Rs 75 lakhs ( Rs. 50 lakhs in case of few States).to opt for composition scheme. This registration window is likely to be open till 30th September,2017 (If Government doesn’t notify any further extension). Earlier this window for registration under composition scheme was open until 16th August,2017.
• Those who will opt for composition scheme during this period will get this facility from 1st October, 2017 for the current financial year. {Note : But will be treated as normal taxpayers for the period before this and will have to file monthly returns as normal taxpayers.}
• Theobjective of composition scheme is to bring simplicity and to reduce the compliance cost
  for the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax
  under this scheme can pay tax at a prescribed percentage of his turnover every quarter,
  instead of paying tax at normal rate.
• Only one return GSTR -4 needs to be filed quarterly unlike 3 returns for normal taxpayers.

How to opt for the composition scheme

• To begin with the taxpayers need to login on GSTN portalusing the valid credentials (User ID & password ).
• Then under the ” Services ” menu select “Application to opt for the composition scheme”.
• After filing in the various details as required in the form.
• Submit the application using Digital Signature or E-signature or Electronic Verification Code.

When will a person opting for composition levy pay tax

• A person opting for composition levy will have to pay tax on quarterly basis before18th of the month succeeding the quarter during which the supplies were made. (For eg. for July to September Quarter – tax should be paid by 18th October,2017).

What is the due date of filing quarterly GST returns under the compositionscheme

• Taxpayers who have opted for composition scheme need to electronically file quarterly returns in Form GSTR-4 onthe GSTN common portal by the 18th of the month succeeding the quarter.

 
Other important points under composition scheme : –

• Composite dealers have to issue a bill of supply instead of tax invoice.
• Composite dealer cannot collect tax paid by him on outward suppliesfrom his customers.
• Composite dealer cannot utilize thetax paid by him on inward supplies.
• Composite dealers can not pass on the credit of taxes paid by them to anyone. (i.e. if theregistered person making purchases from a taxable person payingtax under the composition scheme cannot avail credit.)
• GST rate under composition scheme is
  • 1% for traders ;
  • 2% for manufacturers
  • 3% for restaurants
• The composition scheme will not be available to manufacturers of tobacco and manufactured tobacco substitutes, pan masala, Ice cream and other edible ice, whether or not containingcocoa.
• There is no requirement of invoice wise details in GSTR -4.
• There is no need for them to mention the HSN codes in their returns.
• Note : GSTR 4A is also not required for the 1st quarter i.e. July to September 2017 after the GST rollout.

To summarize a taxable person opting to pay tax under the composition scheme is out of thecredit chain.

Compiled by CA Ankita Khetan. For any queries the author can be reached at [email protected].