Options to opt under GST Registration
A taxpayer whose turnover is below Rs 1.0 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh.
Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.
No Input Tax Credit can be claimed by a dealer opting for composition scheme The taxpayer cannot make any inter-state supply of goods.The dealer cannot supply GST exempted goods.Taxpayer has to pay tax at normal rates for transactions under Reverse Charge Mechanism.If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.Those supplying goods can provide services of upto Rs. 5 lakh.
Incase of regular gst scheme, the dealer gets input credit of all input required for furtherance of the business. Even if charges are paid under RCM (Reverse Charge Mechanism) is treated as input credit for next month.
Incase of composition the input credit is not available on any of items including amount paid under RCM. Over this the dealer needs to pay 1% of total turnover as composition fee.
The chances of general gst dealers purchasing items from composition dealer shall be very less as general dealer shall not be able to get input credit on purchases from composition dealer.
GST eliminates the cascading effect of tax
Higher threshold for registration
Composition scheme for small businesses
Simple and easy online procedure
The number of compliances is lesser
Defined treatment for E-commerce operators
Improved efficiency of logistics
Unorganized sector is regulated under GST
Increased costs due to software purchase
GST will mean an increase in operational costs
GST came into effect in the middle of the financial year
GST is an online taxation system SMEs will have a higher tax burden