Payment of Tax in Composition Scheme
Under the Composition Scheme, the taxpayer will pay tax at prescribed percentage to govt. The GST law has prescribed a lower limit of 2.5% for manufactures and 1% for others for 1%. There has been no upper limit set as of now. It is estimated that it will always remain below 5% and will go beyond only in rare cases.
Though the compliances for Composition Scheme are easier than those for normal taxpayers, B2B sellers may lose out on customers if their customers want to claim input tax credit, since they will not be able to provide input credit on the same.
