Oct 12, 2017
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Composition scheme under GST with reference to section 10 of CGST Act

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Composition scheme under GST

Composition scheme under GST is a convenient way for small taxpayers to escape from too many legal compliances and pay the tax at a fixed rate on the turnover.  The GST Council in its 22nd meeting has decided to allow taxpayers with Rs 1.5 crore to file quarterly returns and at the same time increased the threshold for composition scheme under GST to Rs. 1 crore** from the present Rs. 75 lakh.

**GST: Composition scheme extended to Rs. 1 cr, quarterly returns for taxpayers with turnover of Rs 1.5 cr 

1.What is meant by Composition Scheme under GST?

The One Nation One Tax Scheme (GST India) which promises to club all the indirect taxes into one also boasts a composition scheme for small businesses. However, Composition Scheme under GST will make compliance with tax laws hassle free for eligible businesses opting for the scheme.

  1. Eligibility – Although Not everyone is eligible to enroll under this scheme. Additionally ,it meant to that taxpayers whose aggregate turnover does not exceed Rs.75 lakh threshold in a Financial Year.
  2. Tax rate – Rate of tax as prescribed will be less than regular GST but not less than 1% of the turnover during the Financial Year. Tax rates under the scheme are expected to be between 1% and 3%.
  3. However Not eligible for Input Tax Credit – As per section 16, those goods and services on which Composition Tax has been paid (under section 8) do not qualify for Input Tax Credit.
  4. In addition applies to Intra-state supplies – Local suppliers, i.e., those who supply within a state can only take advantage of this scheme. However,Inter-state suppliers will come under regular GST laws.

2. What are the total numbers of rules available for composition rule under GST?

 1- Intimation for composition levy

 2-Effective date for composition levy

 3-Conditions and restrictions for composition levy

 4-Validity of composition levy

 5-Rate of tax of the composition levy

3.What are the forms that are available for filing composition scheme under GST?

Form Required


Due Date

FORM GST CMP-01 To opt for scheme by provision registration holder Prior to appointed date or within 30 days of the said date
FORM GST CMP-02 Intimation of willingness to opt for scheme Prior to commencement of financial year
FORM GST CMP-03 Details of stock and inward supplies from unregistered person Within 60 days of exercise of option
FORM GST CMP-04 Intimation of withdrawal from scheme Within 7 days of occurrence of event
FORM GST CMP-05 Show cause Notice on contravene of rules or act by proper office On contravention
FORM GST CMP-06 Reply to show cause notice Within 15 days
FORM GST CMP-07 Issue of order Within 30 days
FORM GST REG-01 Registration under composition scheme Prior to appointed date
FORM GST ITC-01 Details of inputs in stock, semi-finished goods and finished goods 30 days of option withdrawn
FORM GST ITC-13 Intimation of ITC available Within 60 days of commencement of financial year


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Renuka is a Final Year LL.B. student at Siddharth College of Law. She has done her Bachelors in Banking & Insurance and has also completed her Masters in Business Management . She likes to participate in legal workshops and Moot Courts. Besides her interest in law, she has a keen aptitude for legal research and is good at putting her analysis into words.

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