Businesses under composition scheme to soon start filing GST returns
Businesses which opted for composition scheme in the July-September
quarter will get to file their maiden GST returns soon.
Around 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy, under the goods and services tax (GST) which rolled out from 1 July. There are over
1 crore businesses registered under GST. While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain.
“We are ready with GSTR-4 which will be used by composition scheme businesses for filing returns. The utility will be available on GSTN portal soon,” GST Network CEO Prakash Kumar told PTI.
Under this scheme, a taxpayer will pay tax as a percentage of his/her turnover during the financial year without the benefit of Input Tax Credit. The floor rate of tax for CGST and SGST shall not be less than 1%. A taxpayer opting for composition scheme will not collect any tax from his/her customers.
When the eligible taxpayer is opting for the Composition Scheme under GST, a taxpayer has to file a summarized returns on a quarterly basis, instead of three monthly returns (as is applicable for normal businesses).
There are over 1 crore registered businesses under the GST, which has amalgamated over a dozen taxes to make India a single market for seamless flow of goods and services. The GST Council had earlier this month raised the turnover threshold from Rs 75 lakh to Rs 1 crore for businesses to opt for the scheme. Hence, those with turnover of up to Rs 1 crore can take advantage of composition scheme beginning October 1.
Also, a group of state finance ministers have been set up to make the scheme more attractive.
They will be benefit of small & medium enterprises (SME’S) and restaurants as they continue to remain outside the ambit of normal levy. This will contribute on a large scale to the GDP as well as job sector of the country.
Businesses dealing only in goods can only opt for composition scheme. Services providers have been kept outside the scope of this scheme. However, restaurant sector taxpayers may also opt for the scheme.
Composition Scheme – Applicable GST Rate:-
|Type of Business||CGST||SGST||Total|
|Manufacturer and Traders||0.50%||0.50%||1.00%|
|Restaurant not serving alcohol||2.50%||2.50%||5%|