COMPOSITE SCHEME

What is the tax rate applicable on a composition dealer?

A registered taxpayer, who is registered under the Composite Scheme will pay tax at a rate not more than 1% for manufacturer, 2.5% for restaurant sector and 0.5% for other suppliers of turnover.

Must a Composition Dealer maintain detailed records?

No, a dealer registered under composition scheme is not required to maintain detailed records as in the case of a normal taxpayer.

Do Composition Dealers have the option to avail Input Tax Credit?

No, a Composition Dealer is not allowed to avail input tax credit of GST paid to their supplier.

Can a Composition Dealer issue a tax invoice?

Ans. No. Since a Composition Dealer is not allowed to avail input tax credit, such a dealer cannot issue a tax invoice as well. A buyer from composition dealer will not be able to claim input tax on such goods.

Which returns are required to be filed by a taxable person registered under Composite Scheme?

The taxable person is required to furnish only one return i.e. GSTR-4 on a quarterly basis and an annual return in FORM GSTR-9A.