Thursday, September 27, 2018



 The GST alters the rules of the game, as its implementation is accompanied by a huge outflow of profits.

            In the past, there were many taxes in India such as services, VAT, indirect taxes and many others, which were eventually borne by consumers, leading to double taxation or cascading effects. According to the GST, about 17 taxes are included in a single tax.

           The GST applies to almost all business consultants, which has resulted in increased revenue for the government. When buying goods or services, CGST and SGST, both central and state taxes, are collected, eliminating confusion. With the introduction of the GST, a new trade compliance regime is introduced. Large organizations in India have the resources and experience to facilitate compliance procedures.

          On the other hand, small and medium-sized enterprises (SMEs) and new businesses will find it difficult to comply with these provisions. To reduce the compliance burden for small businesses, a dialing system has been put in place GST Act, which requires consultants to pay taxes at a minimum rate based on their sales. This largely corresponds to the provisions in the VAT law.

         In this article, we explained the composition scheme of the GST, which can submit the application, the eligibility criteria. Restrictions and how small businesses can benefit.

                              Registration by dialing scheme is optional and optional. Any company with a turnover below Rs.75 lakhs for these states can choose this system, but every day, if sales exceed the above limit, it will become unacceptable and must be registered in a regular system. Before making a decision to compose a composition, it is necessary to fulfill certain conditions.

Following Condition:

  • Any appraiser who deals only with the delivery of goods can choose this system, that is, this provision does not apply to service providers. Providers of food services are excluded.
  • There should not be an interstate supply of goods, which means that companies that have only an internal stock of goods are eligible to participate.
  • Any seller who delivers goods through an e-commerce vendor is excluded from registration as a telephone company. For example: if M / s ABC sells its products through Flipkart or Amazon (Electronic Commerce Operator), then M / s. ABC cannot decide on a composition scheme.
  • The drawing of the compilation is collected for all business sectors with the same PAN. A taxpayer can not choose a composition system for one but will choose to pay taxes for others. For example, the taxpayer separately registered the following industries: sales of shoes, sales of cell phones, franchisees McDonald's. Here, the compilation scheme will be available for three industries.
  •  Merchants are not allowed to charge a commission from the recipient and are not allowed to take out a loan before taxes.
  • If a person does not have the right to work on the compilation system, the tax paid is taxed + interest and a fine equal to the tax amount.

  • -: People who can not Opt. the composition scheme:-
                         • Service providers except for restaurant operators (food and soft drinks)
                            • Providers of non-taxable goods
                               • When the person delivers goods between states
                                   • Providers who provide goods through an e-commerce operator eligible to collect                                          TCS
                                       • Supplier of tobacco, pan masala, and ice cream

-:Bill of supply:-

Since the dealer of the COMPOSITION SCHEME cannot pass on the tax credit, he must issue the bill. The details mentioned in the delivery are as follows:

A serial number that is a unique number for each fiscal year
Date of issue
If the recipient is registered, name, address, and GSTIN of the recipient
HSN commodity code or service accounting code
Description of goods/services
Value of goods/services after adjustment of discount or discount
Signature or digital signature of the supplier or his authorized representative


  • Less compliance:-

                        In the normal scenario, a taxpayer to whom the GST is subject has to make at least three months and one annual returns. To be precise, he has to file 37 returns in a year or impose a penalty for non-performance.

               For small suppliers and manufacturers, it is very difficult to keep such detailed accounting records and to record each transaction with receipts.

Considering the composition Scheme only downloads a quarterly report under GSTR-4:

  • 18th of July - 1st quarter
  • 18th October - 2nd quarter
  • 18th - 3rd quarter
  • 18th April - 4th quarter

                 This will reduce the compliance burden on SMEs and focus on their activities rather than on compliance procedures.

  • Reduction of taxes payable:-
Another advantage of recording in the composition scheme is the structure of the payments.

For Manufacture and Traders
For Restaurant other than Alcoholic

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