But in reality, not everyone can apply for it.

𝗪𝗵𝗮𝘁 𝗶𝘀 𝗮 𝗖𝗼𝗺𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗦𝗰𝗵𝗲𝗺𝗲?
Scheme under GST for small businesses and startups to simplify compliance by paying tax at a fixed rate on their turnover instead of following regular GST procedures.

𝗪𝗵𝗼 𝗶𝘀 𝗲𝗹𝗶𝗴𝗶𝗯𝗹𝗲 𝘂𝗻𝗱𝗲𝗿 𝘁𝗵𝗲 𝗦𝗰𝗵𝗲𝗺𝗲?

→ Businesses with annual turnover of up to ₹1.5 crore (₹75 lakhs for North-Eastern states and Himachal Pradesh).

→ Businesses supplying service with annual turnover up to ₹50 lakhs.

→ Businesses that don’t engage in:
Manufacturing of icecream, pan masala, or tobacco.
Inter-state or GST exempted supplies.
E-commerce sales and services under Section 52 of CGST Act, 2017.

𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝘂𝗻𝗱𝗲𝗿 𝗖𝗼𝗺𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗦𝗰𝗵𝗲𝗺𝗲:
Quarterly GST payments through Form CMP-08 instead of monthly.
Simplified GSTR-4 filing annually.
No Input Tax Credit (ITC) available.
Invoices cannot charge GST separately to customers.
Registration of all businesses under same PAN collectively or opt out of the scheme.
Mention ‘composition taxable person’ on notice/signboard at place of business and every bill of supply issued by them.

𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝗖𝗼𝗺𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗦𝗰𝗵𝗲𝗺𝗲:
Reduced compliance procedures and costs but restricted business expansion.
Limited tax liability.
Lower tax rates but no ITC benefits.

Before opting for Composition Scheme for easier tax compliance, it is important to understand the restrictions and implications.