Process of GST Filing under Composition Scheme
Get Expert Advice
You can get expert advice on GST Return filing
Documents submission & verification
Once you submit the documents required, our experts will do the paperwork
We will file the documents with the concerned authority
Completion of work
Once your work is done, we will send you the documents back
A document which furnishes all the purchases, sales, tax paid on purchases, and tax collected on sales and other related details is called the GST Return. GSTR-4 is the return for composition dealers, under composition scheme offered under the GST regime for certain types of taxpayers. Dealers are required to pay tax in a quarterly statement CMP-08 by 18th of the month after the end of the quarter. Also, a dealer opting for the composition scheme is required to furnish only 1 return which is GSTR 4 once in a year by 30th of April of next financial year.
Unlike a normal taxpayer, composition dealers do not have to maintain detailed records of all their financial transactions. They must issue bills of supply and not tax invoices, as the dealer pays the tax out of their pocket. Such dealers cannot claim any input tax credit and they have to pay tax at normal rates for transactions under the Reverse charge mechanism.
Eligibility for GST Filing under Composition Scheme
- Businesses whose turnover is below Rs 1.5 crore in a year can opt for composition scheme. In case of North-Eastern states and Himachal Pradesh, the limit is Rs 75 lakh. The businesses must consider the turnover of all businesses that use the same PAN card in calculating the total annual turnover.
- The following individuals cannot opt for the Composition Scheme under the GST regime: 1. Manufacturers of ice cream, tobacco and pan masala 2. Individuals making inter-state supplies 3. Casual taxpayer OR Non-resident taxpayer 4. Businesses that use an e-commerce operator to supply goods
Frequently asked questions
Who cannot opt for Composition Scheme under GST?
The following individuals cannot opt for Composition Scheme:
- Individuals making inter-state supplies of goods
- Businesses that use e-commerce operators to supply goods
- Manufacturers of notified goods
- Casual Taxpayer
- Non-Resident Taxpayer
- Input Service Distributor (ISD)
- TDS Deductor/Tax Collector
How can a taxpayer convert from regular to composition scheme under GST?
Any taxpayer who is registered as normal taxpayer under GST needs to file an application to opt for Composition Scheme in Form GST-CMP-02 at GST Portal prior to the commencement of financial year for which the option to pay tax under the aforesaid section is exercised.
Who can be eligible for Composition Scheme?
Businesses whose turnover is below Rs 1.5 crore in a year can opt for composition scheme. In case of North-Eastern states and Himachal Pradesh, the limit is Rs 75 lakh. The businesses must consider the turnover of all businesses that use the same PAN card in calculating the total annual turnover.
What is the return filing procedure under Composition Scheme?
Taxpayers are required to pay tax and furnish a statement, every quarter or part thereof, as the case may be in Form CMP-08 by 18th of the month after the end of the quarter.And further they are required to furnish GSTR-4 which is the return for composition dealers, under composition scheme. GSTR-4 is filed once in a year by 30th of April of next financial year.