Composition Levy -PDF Presentation
Composition Levy - POF Presentation Fast Track Taxation
Introduction
The Composition levy scheme is avery simple, hassle-free compliance scheme for
smalltaxpayers.
" It is a voluntary and optional scheme.
Composition Scheme is a scheme to help and support smallsuppliers.
Suppliers whose "aggregate turnover" is less than or equal t1.srore (375 lakhs
for some specified states) in the preceding Financial Year are eligible toopt for this
scheme.
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< 88 Q Composition Levy - PDF Presentation
Compositon Levy - POF Presentation Fast Lack Taxatic
" Suppliers under Composition Scheme have to pay tax at concessional rates as
follows:
o Manufacturer of goods - 1% of the "turnover in the state" or union territory
o Restaurant Service - 5% of the "turnover in the state" or union territory
oOther Suppliers - 1% of the "turnover of taxable supplies" of goods and
services in the state or union territory
" However, upon opting for this scheme,
ohe cannot issue taxable invoice under GST law; and
o neither collect GST from his customers
o nor can he claim Input Tax credit on his purchases.
CA NISHANT KUMAR 3
Composition Levy - PDF Presentation
Composition Levy - PDF Presentation Fast Track Taxation
Eligibility forComposition Scheme
"A person whose aggregate turnover is less than or equal to 1.5 crore in the
preceding financialyear is eligible to opt for composition scheme.
However, if the taxable person is registered in any of the following states, the
aggregate turnover should be less than or equal to R75 lakhs in the preceding
financial year. It means that if the aggregate turnover exceeds 75 lakhs for a
taxable person registered in any of the below mentioned states, then the person
cannot opt for Composition Scheme, even if his turnover doesn't exceed 1.5
crore.
The states are:
CA NISHANT KUMAR 4
Composition Levy -PDF Presentation
Composition Levy - POF Presentation Fast Track Taxation
o Arunachal Pradesh
o Manipur
oMeghalaya
o Mizoram
o Nagaland
oSikkim
o Tripura
Uttarakhand
CA NISHANT KUMAR 5
Composition Levy -PDF Presentation X **
Composition Lery - PODF Presentation Fast Track Taxation
" Aggregate Turnover means the aggregate value of:
o Alltaxable supplies
oExempt supplies
o Exports of goods or services or both, and
o Inter-state supplies
of persons having the same PAN, to be computed on all India basis, but excludes:
o Value of inward supplies on which tax is payable by a person on reverse charge
basis
o Central Tax, State Tax, Union Territory Tax, Integrated Tax, and Cess.
CA NISHANT KUMAR 6
< Composition Levy - PDF Presentation +**
Composition Levy - POF Presentation Fast Track Taxation
" Explanation for Calculation of Aggregate Turnover: Aggregate turnover should
o Include the value of supplies made by such person from 1" April of a financial
year upto the date when he becomes liable for registration under this act, but
o Exclude the value of exempt supply of services provided by way of extending
deposits, loans or advances in so far as the consideration is represented by
way of interest or discount.
CA NISHANT KUMAR 7
