GST Registration (Composition)

Aggregate turnover means aggregate value of all taxable and non-taxable supplies, exempt supplies and export of goods and/or services of a person having same PAN. GST is not included in the aggregate turnover. So if an individual open two firms and combined turnover is more than limit of Rs. 1.5 crores/ 75 Lakhs/ 50 Lakhs then he cannot take composition scheme.

If a person’s turnover exceeds the limit of Rs. 1.5 Crores in a financial year then from such day the person ceases to be in composition scheme and needs to pay tax under normal scheme from such day.

• Persons who cannot opt for composition scheme:-
  • Supplier of non taxable goods/ exempted goods
  • Persons engaged in inter-state supply of goods
  • Persons dealing in supply of goods through e-commerce operator like Amazon/Flipkart/Grofers etc.
  • Manufacturer of Tobacco, Pan Masala, Ice Cream etc.
  • Casual Taxable Person
  • Non-Resident Taxable Person
     
• Composition dealers are not allowed to charge tax separately in the invoice issued to customer and neither are they allowed to take Input Tax Credit.
• Composition Dealer shall issue “Bill of Supply” in place of “Tax Invoice. 
• Composition Dealers should mention the words “Composition Taxable Person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him.
• Such person shall mention the words “Composition Taxable Person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place of business.
   

Since the Composition dealer cannot pass Input Tax Credit, he is required to issue “Bill of Supply” in place of “Tax Invoice”. Following details are to be mentioned in the “Bill of Supply”:

• Name, address, and GSTIN of the dealer
• Invoice number serially numbered
• Date of issue
• If the recipient of goods is registered then the name, address, and GSTIN of the recipient
• HSN Code of goods or Accounting Code for services
• Description of goods/services
• Value of the goods/services after adjusting any discount or abatement
• Signature or digital signature of the supplier or his authorized representative

If a person is taking fresh registration under GST and wants to opt for Composition Scheme, he must fill Part-B of GST REG-01 while applying for registration.

If a person is already registered under normal scheme and he opts to switch to Composition Scheme, he must file intimation in Form GST CMP-2 before commencement of the financial year for which he wants to opt. Further, he is also required to file Form ITC-03 within 60 days from commencement of relevant financial year containing the details about ITC related to inputs, semi finished and finished goods held in stock. ITC-03 is filed only once and not annually.

If a registered dealer wants to withdraw from the composition scheme, he shall file an application in Form GST CMP-04 before the date of such withdrawal.

Every person who has filed GST CMP-04 or has been issued order for withdrawal of scheme under GST CMP-07 has to furnish GST ITC-01 containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which the option is withdrawn or denied, within 30 days, from the date from which the option is withdrawn or from the date of order passed in FORM GST CMP-07, as the case may be.

A Composition dealer is required to file Form CMP-08, which is a special statement cum challan to declare the details or summary of self assessed tax payable for a given quarter. It also acts as a challan for making tax payment. Form CMP-08 must be filed quarterly on or before 18th day from the end of the relevant quarter of any financial year. In addition, a Composition dealer is also required to file his annual return in Form GSTR-4 by 30th April following the end of financial year.