Composition Scheme For Retail Traders Under GST

[sunil kumar Gupta]

 

Comparision of Normal Dealer & Composition Dealer Under GST
NORMAL REGISTERED DEALER
		5%	12%	18%	28%
	COLLECTED FROM CUTOMER	1,00,000.00	1,00,000.00	1,00,000.00	1,00,000.00
	GST	4,761.90	10,714.29	15,254.24	21,875.00
(A)	SELLING PRICE	95,238.10	89,285.71	84,745.76	78,125.00
(B)	PURCHASE PRICE	70,000.00	70,000.00	70,000.00	70,000.00
	GST PAID ON PURCHASE	3,500.00	8,400.00	12,600.00	19,600.00
	NET  AMOUNT PAID	73,500.00	78,400.00	82,600.00	89,600.00
(A-B)	NET INCOME	25,238.10	19,285.71	14,745.76	8,125.00
COMPOSITION DEALER
		5%	12%	18%	28%
	COLLECTED FROM CUTOMER	1,00,000.00	1,00,000.00	1,00,000.00	1,00,000.00
	GST@1% (to be borne by seller)	990.10	990.10	990.10	990.10
(A)	NET RECIEVED	99,009.90	99,009.90	99,009.90	99,009.90
	PURCHASE PRICE	70,000.00	70,000.00	70,000.00	70,000.00
	GST PAID ON PURCHASE	3,500.00	8,400.00	12,600.00	19,600.00
(B)	NET  AMOUNT PAID	73,500.00	78,400.00	82,600.00	89,600.00
(A-B)	NET INCOME	25,509.90	20,609.90	16,409.90	9,409.90
	Difference in Income (benefit to composition dealer)	271.81	1,324.19	1,664.14	1,284.90

Notes 

1  Composition also requires quarterly returns in GSTR-4 to be filed and one annual return in GSTR-9A. GSTR-4 is to be filed upto 18th of the month following the qaurter.GSTR-9 is to be filed upto 31st December of next financial year.

2  Cash sales of upto ₹ 200 can be clubbed together as one on daily basis. However bill should be raised where the cutomer so demands

3  Traders are to pay tax @0.5% CGST, 0.5% SGST .

4  Purchase from unregistered dealers can be made upto ₹ 5000/- per day in aggregate without any liability to be registered.

5  A dealer registered under composition scheme is not required to maintain detailed records as in the case of a normal taxpayer.

6  A Composition Dealer is not allowed to avail input tax credit of GST paid to their supplier.

7  Since a Composition Dealer is not allowed to avail input tax credit, such a dealer cannot issue a tax invoice as well. A buyer from composition dealer will not be able to claim input tax on such goods.

8  A Composition Dealer is not allowed to collect composition tax from the buyer.

9  Any dealer whose aggregate turnover in a financial year does not exceed ₹ 75 Lakh can opt for composition scheme.

10  Composition Scheme is available only for intra-state supplies. If a dealer is involved in inter-State supplies, then he cannot opt for the scheme.

11  No HSN Codes are required to be mentioned on the Invoices.