What is composition scheme and when should a business opt for it?

What is composition scheme and when should a business opt for it?

Small businesses having an annual turnover Rs. 1.5 crore** ( Rs. 75 Lac for NE States) can opt for Composition scheme.

Composition dealers will pay nominal tax rates based on the type of business:

1.  Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers).
2. They cannot issue taxable invoices, i.e., can't collect tax from customers and are required to pay the tax out of their own pocket.
3. Businesses that have opted for Composition Scheme cannot claim any Input Tax Credit.

Composition scheme is not applicable to:

1.  Service providers
2. Inter-state sellers
3. E-commerce sellers
4. Supplier of non-taxable goods
5. Manufacturer of Notified goods

For more information on this visit https://www.taxaj.com/






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