27/12/2016
Composition Tax under Revised
GST Law
Revised GST Law under Section -9 provides that small taxpayer can opt for
the scheme of composition tax instead of opting for paying tax under the
regular supply of goods. Here this should be noted that this option is not
available to registered taxable person who is providing only service . By
opting the composition tax scheme , one can save himself from all the hassle
of exhaustive provision of GST Law. Before we switch over to related
provision of this section it is mandatory to understand the definition of
Aggregate Turnover.
As per Section 2(6) , “Aggregate Turnover” means the aggregate value of all
taxable supplies, exempt supplies , export of goods and /or services and
interstate supplies of person having the same PAN, to be computed on all
India basis and excludes taxes, if any, charged under the head CGST Act,
SGST Act and the IGST Act, as the case may be;
Explanation: Aggregate Turnover does not include the value of inward
supplies on which tax is payable on reverse charges basis u/s 8(3) and the
value of inward supplies.
As per Section -9 this scheme is available to RTP only.
Provision of Composition Tax
1. The proper officer allow registered taxable person, whose aggregate
turnover does not exceed Fifty Lakh in the proceeding financial year, to
pay, in lieu of tax payable by him, an amount calculated at such rate as
may be prescribed but not less than two and half percent in case of
manufacturer and one percent in other case, of the turnover in the state
during the year .
Composition scheme can not be allowed to the following taxable person;
Who is engaged in the supply of services
Person who make supply of goods those are not leviable to tax.
Who make interstate outward supply of goods
Who make supply of any goods through electronic commerce operator
who is required to collect tax at source u/s 56
Who is manufacturer of such goods notified by the council.
This provision will be allowed to RTP only when all registered taxable person
under the same PAN opt to follow the same scheme.
Composition Tax under Revised
GST Law
2. Permission granted to RTP shall be withdrawn on the day when his
turnover exceeds Rs. 50 lacs during financial year.
3. Person opted under sub section-1 , can not collect the composition tax
from recipient on supplies and can not take input tax credit.
4. Proper officer if noticed that RTP is not eligible for composition tax under
sub section -1 , ask such person to pay penalty in addition to tax due and
may apply the provision of sec. 66 and 67 .
Taxable person here means person registered or liable to be registered as per
Schedule –V of this act
