Application for GST Composition Scheme starts, scheme has lots of benefits for small traders

NE BUSINESS BUREAU

AHMEDABAD, MARCH 17

For ease of doing business, application for GST Composition Scheme for the year 2020-21 has started. Existing taxpayers will have to apply online on the GST portal before  March 31, 2020. This scheme is specially designed for small businessmen. Many concessions in terms of keeping their accounts, returns, and tax collections have been given to small businesses, says a GST Council release.

What is the GST composition scheme?

In the composition scheme, businessmen have been given special facilities to pay a fixed rate, lump-sum tax payment and returns only once a year, which is not given to normal taxpayers. Taxpayers with a total turnover of Rs. 1.5 Cr can opt for the scheme. For seven North-Eastern states and Uttarakhand, the limit is Rs. 75 lakh. For a businessman who provides goods as well as services or only services, the total turnover limit is Rs. 50 lakh across the country.

Benefits of composition scheme

GST composition scheme is beneficial for small traders in many ways:-

1. Lump-sum tax at a fixed rate- Taxpayers are not required to deposit GST at different rates on their sale (supply) under the scheme. Instead, he can deposit a lump-sum at a fixed rate on his total sales.
2. Tax once in three months- Instead of paying tax every month, the taxpayer has to deposit tax only once in three months.
3. No obligation of monthly return- While the general taxpayers of GST are required to file returns every month or quarterly, the taxpayers of composition scheme have to file returns only once a year.
4. Less accounting- Due to the non-inclusion of the input tax credit in the process, taxpayers are free from keeping accounting records.

How to join the composition scheme?

it is quite easy to join with the GST composition scheme. For this, businessmen registered as general taxpayers will have to provide information in the CMP-02 form available on the GST portal. The last date to fill the form is 31 March. A businessman registering on the GST portal for the first time can join this scheme at the time of registration by providing information in the form CMP-01 on the portal. Once associated with the scheme, there is no need to give information again in the next financial years. The scheme has a special facility for taxpayers; they can opt-out of this scheme at any time. According to GSTN data, more than 16,82,000 taxpayers are associated with composition schemes.