Organisation : State Goods & Service Tax Department, Kerala GST
Facility : Composition Schemes
State : Kerala
Details : http://keralataxes.gov.in/2017/09/20/composition-schemes/
Website : http://keralataxes.gov.in/
Kerala Taxes Composition Schemes
A registered dealer, whose aggregate turnover in a financial year does not exceed Rs.75 lakhs, is eligible to opt for composition scheme under GST. In the last GST Council, the aggregate turnover limit for availing the scheme has been increased to Rs.1 crore from Rs.75 lakhs.
Related : Kerala Taxes Register as GST Practioner : www.statusin.in/37121.html
Composition scheme can be opted only for the supply of goods, not for services. However, the restaurant sector taxpayers can also opt for this scheme.
A compounded dealer is restricted from collecting tax from the customer. It means that a composition scheme supplier cannot issue a tax invoice either.
A registered taxpayer, who is registered under the Composite Scheme will pay tax at a rate of 2% of turnover for manufacturer, 5% for restaurant sector and 1% for other suppliers. The tax rate mentioned is CGST & SGST together. Half the above rates is the respective share.
FAQ
Can the customer who buys from a taxable person who is under the composition scheme claim composition tax as input tax credit?
No, customer who buys goods from taxable person who is under composition scheme is not eligible for composition input tax credit because a composition scheme supplier cannot issue a tax invoice
Can composition tax be collected from customers?
No, the taxable person under composition scheme is restricted from collecting tax. It means that a composition scheme supplier cannot issue a tax invoice.
What is the threshold for opting to pay tax under the composition scheme?
The threshold for composition scheme is Rs. 50 Lakhs of aggregate turnover in financial year
Can composition scheme be availed if the taxable person effects inter-State supplies?
No, composition scheme is applicable subject to the condition that the taxable person does not affect inter- state supplies.
Can the taxable person under composition scheme claim input tax credit?
No, taxable person under composition scheme is not eligible to claim input tax credit.
What is the minimum rate of tax prescribed for composition scheme?
2.5% in case of manufacturers and 1% in case of others
What is the scope of composition scheme under GST?
Small taxpayers with an aggregate turnover in a financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC.
The floor rate of tax for CGST and SGST shall not be less than [2.5% in case of manufacturers and 1% in case of others].
A tax payer opting for composition levy shall not collect any tax from his customers. Tax payers making inter- state supplies or paying tax on reverse charge basis shall not be eligible for composition scheme.
Whether the composition scheme will be optional or compulsory?
Optional.
Will a taxable person be eligible to opt for composition scheme only for one out of 3 business verticals?
No, composition scheme would become applicable for all the business verticals/registrations which are separately held by the person with same PAN.
Aggregate Turnover
How to compute ‘aggregate turnover’ to determine eligibility for composition scheme?
The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, ‘aggregate turnover’ means ‘Value of all supplies (taxable and non-taxable supplies including interstate supplies + Exempt supplies + Exports+) and it excludes Taxes levied under CGST Act, SGST Act and IGST Act, Value of inward supplies + Value of supplies taxable under reverse charge of a person having the same PAN.