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GST Composition Levy-Section 10 (GST made easy by Devendra Kumar Sir) Free Demo Class on GST (Indirect Tax)

Devendra Kumar
31/05/2018 0 0

Composition Leavy:


The objective of composition scheme is to bring simplicity and to reduce the compliance cost

For the small taxpayers. Supplier opting for composition leavy need not worry about the

classification of their goods or service or both, the rate of GST applicable on the same, They are

not required to raise any tax invoice but merely need to issue a bill of supply wherein no tax will

Be charged from the recipient. At the end of a quarter, the registered person opting for

composition leavy would pay a certain specified percentage of his turnover of the quarter as

tax, without availing the benefit of input tax credit


Who can opt –

A taxable person, having an aggregate turnover not exceeding Rs. 100 Lacs (75 Lakhs in special category states) in the preceding financial year [Limit raised vide Notification No. 46/2017] – Can be opted out during the year

• Who cannot opt –

Manufacturer manufacturing notified goods – Supplier of any services other than Restaurant/ Catering etc.

– Supplier engaged in making the supply of goods which are not leviable to tax under the Act

– Supplier making inter-state outward supplies. – Supplier making Sales through e-commerce operators.

– A casual taxable person or non resident taxable person.

• Other provisions – Liable for reverse charge payment

– He cannot claim Input tax credit – He cannot charge/collect any tax from his buyer

– His Tax is not available as credit to Buyer

– He cannot issue tax invoice – Should mention Composition on board

– The goods held in stock on an appointed day, have not been purchased in the course of inter-state or Import or Central purchases against Central Statutory Forms

– Can purchase interstate – He shall mention words Composition Taxable Person in Bill of Supply raised by him

Rates (CGST – Similar rates applicable for SGST)

– Supplies of Goods other than manufacturer 0.5% under CGST Act.

– Supplies of Goods if manufacturer 1% under CGST Act.

– Supplies of specified services of Restaurants, Hotel and Dhaba etc. 2.5% under CGST Act


Procedure for opting for Composition

File intimation in Form GST CMP – 01 (migrating taxpayers) or Section 10 of REG 1 (new taxpayers

For Existing Taxpayers Composition can be opted by filing Form GST CMP-02 before the commencement of FY

The choice available for opting Composition in middle of the year for FY 2017-18

Form ITC – 03 has to be filed within 60 (90 in case of FY 201718) days from the date of for payment of tax under Section 10 reversal of Input Tax Credit on Stock.

Stock details held on date opting for Composition to be provided in Form GST CMP-03
Once choose for Composition is valid till not opt out and conditions are fulfilled of composition dealer.


Procedure for withdrawal of Composition

When conditions of Section 10 are breached
File CMP 04 within seven days


File CMP 04 before opting out

When the officer finds the contravention

SCN in CMP 05

Details of Input tax credit on the stock as on Date of Opting Out is to be filed in Form ITC-01 within 30 days from the date of opting out

Notice can be issued in Form GST CMP-05 by the officer to show cause within 15 days as to why the taxpayer is eligible for Composition Scheme

Reply to notice can be filed in Form GST CMP-06
An order issued by the officer in Form GST CMP-07 with 30 days after receiving the reply.


Devendra Kumar

He is also providing Corporate Training for IFRS, IND AS and GST to various Corporate Employees, CA members and other Professionals along with other stakeholders.

Face to Face Class for CA,ICWA,CS, student at Bangalore

On-Line class all over India

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