New Composition scheme came in force w.e.f 01-04-2019 vide Notification No. 2/2019-Central Tax (Rate)
- Person having turnover both of goods & services up to 50 L in Previous F y may opt to pay tax @6% on intra-state supplies up to 50L.
- Person opting to pay tax @ 6% shall issue bill of Supply instead of tax invoice and bill of supply shall have following word at the top “taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’.”
- Value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be counted in aggregate turnover only for determining eligibility of the person to opt for new composition scheme.
- Person opting to pay tax @ 6%should not collect any GST from recipient and not entitled to any ITC.
- New scheme to pay tax @ 6% is Not Applicable to: Composite dealers / Person making exempted or interstate supply / Casual Taxable Person / Non – resident Taxable Person / E- Commerce operator required to collect TCS / Person supplying Ice- cream& other edible ice whether or not containing Cocoa, PAN Masala or tobacco and manufactured tobacco substitutes.
- For the purpose of determination of tax payable First supplies of goods or services or both shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act.
Example: A person who is unregistered, need not pay GST on first 20 lacs and shall 6% GST from 20 lacs to 50 lacs.
- For the purposes of determining eligibility of a person to pay GST @6%, First supplies of goods or services or bothshall include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the said Act.
- Person opting to pay GST @ 6% scheme, registered person to pay GST from 01-04-2019 & unregistered person from date of registration.
- Unregistered person opting to pay tax @ 6% has to apply for the scheme at the time of registration by indicating the option at serial no. 5 and 6.1(iii) of FORM GST REG-01 at the time of filing of application for registration.
- Composition rules will apply if anybody opt to pay tax under 6% scheme.
- A registered person who wants to opt for payment of tax @ 6% may do so by filling intimation in Form GST CMP-02 by selecting category of registered person as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 30.04.2019.
- All registered persons under same PAN shall pay GST @ 6%
- Person opting to pay GST @6% shall pay amount equal to ITC of Capital Goods & of Input of Finished goods held in stock.
- Composition Dealer or dealer under Scheme of 6% shall file :GST CMP -08 within 18 days of Quarter ending & GSTR – 4 within 30 days of year ending. (N.No 21/2019 – Central Tax dt 23-04-2019)
- Composition Dealer or Dealer under 6% scheme to pay Tax Quarterly even Tax Liability under RCM.