GST has finally become a reality in the year 2017. Threfore, for smooth and continuous migration to GST, the Central Board of Excise and Customs (CBEC) has again come up with frequently asked questions (FAQs) pertaining to Composition Scheme in GST.
Question 1: How to opt composition scheme?
Answer 1: You can opt for the Composition scheme if you are a regular taxpayer. This is with an aggregate annual domestic PAN-based turnover as specified from time to time.
You cannot opt for the Composition scheme if you are/you make:
- any supply of goods that are not liable to be taxed
- inter-state outward supply of goods
- supplies through electronic commerce operators(eCommerce)
- Manufacturer of notified goods
- casual dealer
- Non-Resident Foreign Taxpayer
- A person registered as Input Service Distributor (ISD)
- A person registered as TDS Deductor/Tax Collector
Question 2: How can I apply, if already registered as a regular taxpayer?
Answer 2: kindly perform the following steps on the GST portal:
- Log in to the GST portal
- Go to Services > Registration > Application to Opt for Composition Levy
- Fill the form and submit
Question 3: How Can I convert from regular to composition scheme?
Answer 3: You need to file an application to opt for a Composition scheme in Form GST-CMP-02 at GST Portal. Also, this has to be done prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised.
Question 4: When to apply for the Composition Scheme?
Answer 4: You have to file an online application on the GST portal to Opt for the Composition scheme. Below are the categories of Taxpayers who can opt for this scheme:
- A New Taxpayer: Any person who becomes liable to register under GST Act, needs to file his option to pay the composition amount in the Application for New Registration in Form GST REG-01.
- Existing Taxpayer: Any taxpayer who is registered as a normal taxpayer under GST needs to file an application to opt for the Composition scheme. this has to be done in Form GST-CMP-02 at the GST Portal. Also, it has to be applied prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised.
Question 4: Is it mandatory to file a Stock Intimation?
Answer 4 : Yes
Question 5: How can I file a Stock Intimation?
Answer 5: You must submit stock information details within 30 days from the date of the request for composition information.
The application for the selection of composition scheme is not subject to the approval of the tax authorities. However, when filling out the application, you will be marked as a composition taxpayer in the system and changes will be made to the system as a result.
Further, if it is found that you are not eligible for the composition scheme or have not filed stock intimation, you will be forcibly removed from the composition scheme by initiating appropriate proceedings.
The stock information you have submitted is not processed by the State and Central Tax Authority. However, if it is noticed by the tax authorities that the inconsistent details of stock and ITC submitted in the stock intimation are incorrect, then the tax authorities may initiate appropriate action against you from the previous office.
Question 6: Can I opt Composition scheme for the supply of services?
Answer 6: Yes, from FY 2019-20 onwards, you can opt for the Composition scheme for services also.
Question 7: What type of GST returns I need to file?
Answer 7: The Composition taxpayer needs to pay tax and file a statement, every quarter in FORM GST CMP-08. Also, he has to file a return for every financial year in FORM GSTR-4.
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