Availing the GST Composition Scheme: A Simplified Tax Structure for Taxpayers

In the fiscal year 2024-25, existing GST taxpayers have the opportunity to benefit from the GST Composition Scheme by ensuring their application is submitted before March 31, 2024. This scheme offers a simplified tax structure for eligible taxpayers, provided their annual turnover falls within the specified threshold. Once the intimation for transitioning to the GST Composition Scheme is submitted, taxpayers are not required to file another intimation as long as certain conditions are met. These conditions entail the taxpayer remaining eligible for the GST Composition Scheme or not withdrawing from it.

As per Sanjay Chhabria, Director of Indirect Tax at Nexdigm, a tax and business consultancy services company, businesses with an annual aggregate turnover of up to Rs 1.5 crore (Rs 75 lakhs for special category States), including restaurants, can choose to opt for the GST Composition Scheme. However, for service providers other than restaurants, the turnover threshold is set at Rs 50 lakh.

Procedures for Opting for the GST Composition Scheme

There are two methods to apply for the GST Composition Scheme: during GST registration or before the commencement of the intended financial year for opting for the scheme.

“The composition scheme can be availed during the process of applying for fresh GST registration. However, existing GST-registered taxpayers desiring to transition to this scheme are required to file an intimation using a specified form.

Eligible GST-registered taxpayers intending to opt for the GST Composition Scheme must submit an electronic intimation in Form CMP-02 before the commencement of the financial year for which the scheme is being sought. Once filed, this intimation remains valid as long as the taxpayer is eligible for the scheme or until the taxpayer withdraws from it.

For existing GST-registered individuals applying for the GST Composition scheme, the process involves logging in to the GST portal, navigating to the Services section, selecting ‘Registration’, clicking on ‘Application to Opt for Composition Levy’, completing Form CMP-02, and submitting it.”

Source: The Economic Times