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Mystery unlocked - Composition Scheme under GST Laws

Goods and Services Tax - GST - By: - Piyush Jain - Dated:- 13-1-2018 Last Replied Date:- 31-1-2018 - A. Who can opt for Composition Scheme? Businesses with annual turnover upto ₹ 1.5 crore* can opt for composition scheme. Turnover of all businesses with same PAN has to be added up to calculate turnover for the purpose of composition scheme. Only Manufacturers of goods, Dealers, and Restaurants (not serving alcohol) can opt for composition scheme. B. What is the tax rate applicable to a Com .....

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erse charge for a composition dealer. D. I am purchasing goods from an unregistered dealer. Do I need to pay tax? Tax at normal rates has to be paid on purchases from an unregistered dealer only for the months of July and August 2017. From September there is no need to pay tax on these purchases. No ITC is available on tax paid under reverse charge. E. Should I pay IGST interstate purchases attracting reverse charge? IGST should not be paid by a composition dealer. The dealer is required to pay .....

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Charge is applicable + Tax on B2B purchases from unregistered suppliers (July and August 2017) + Tax on Import of Services The rate of Tax on transactions under Reverse Charge, purchase from an unregistered dealer and import of services will be at normal rates, i.e. the rates applicable to the supplies. Rates under Composition Scheme are applicable only to sales of a composition dealer. G. Should a Composition Dealer maintain detailed records? No, a dealer registered under composition scheme is .....

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the returns to be filed by a Composition Dealer? The taxable person is required to furnish only one return i.e. GSTR-4 on a quarterly basis and an annual return in FORM GSTR-9A. Also, auto drafted details are not available for a composition dealer for the quarters July - September, and October - December. This means that all sales details have to be manually entered by the Composition Dealer. K. Can a Composition Dealer collect tax from customers? No, a Composition Dealer is not allowed to coll .....

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f input in stock, or in semi-finished goods or in finished goods held on the day before the day of opting out of composition scheme. N. What are the conditions for availing input credit on stock lying at the time of transition? Following are the conditions which must be addressed by the taxpayer to avail credit on input at the time of transition from composition scheme to the normal scheme: Inputs or goods will be used for making taxable supplies. The CENVAT Credit was eligible to be claimed in .....

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to the credit of input tax in respect of inputs held in stock on the day immediately preceding the date of such switchover. The balance of input tax credit after payment of such amount, if any lying in the credit ledger shall lapse. P. Can I opt for Composition Scheme in one year and opt out in next year? Yes, this is possible. You can opt to switch between the Composition Scheme and the normal scheme based on your turnover. However, you will have to keep in mind that this will affect the way y .....

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