What is Composition scheme: – This scheme is eligible to small taxpayers whose turnover in case of goods is not more than 1.5 crores and in case of services is 10% of turnover or 5 lakhs whichever is higher.

GST returns to be filed: – A person registered under the GST composition scheme can file a quarterly return which is GSTR-4 and escape from tedious GST filing compliances.

Conditions under GST composition scheme:-

1.       Must not issue a tax invoice but a “bill of supply”.

2.       No ITC (Input tax credit can be claimed)

3.       Not eligible for Inter state supplies

4.       The Taxpayer has to mention the words “composition levy” on all the boards, notices and sign boards,  at their place of business.

5.       Cannot collect tax on outward supplies made by him from customers.

  Restrictions under GST composition scheme:-

1.       A person who is a manufacturer of ice cream, pan masala, and tobacco

2.       A person making Inter state supplies

3.       A casual taxable person

 These people cannot opt for a composition scheme.

New rule in budget 2023.

The finance minister has extended the composition scheme to small E-commerce operators who are making intra-supply of goods and having turnover within the threshold mentioned in the scheme.