GST Filing & Payment - Composition Scheme Dealers 2020-21

Due to the impact of Corona Virus, the lives of the people became highly unstable and the Governments across the globe struggles to lift back the manufacturing and industrial sector. The impact of the devastation forced Governments to lockdown their countries wholly or partially. To create a stable economic platform, the Government of India slashed and waived all the penalties and postponed to pay taxes for people. As a result, many taxpayers unable to register or avail schemes due to lockdown of all central and state departments. However, the GoI extended time period for filing taxes and to avail schemes. As such, through the Notification No. 30/2020, the Central Board of Indirect Taxes and Customs implemented Central Goods and Services Tax (Fourth Amendment) Rules, 2020. In the Fourth Amendment, the CBIC notified that the taxpayer liable to taxes for the Composition Scheme for the year 2020-21, the taxpayer may choose to file the taxes by: Sending an intimation in

Form GST CMP-02, signed and verified through an electronic code through the GST Portal and furnish the statement in Form GST ITC-03 as per rule 44 on or before 31st July 2020 or The taxpayer may also choose to file directly through a Facilitation Centre as notified by the Commissioner on or before 30th June 2020. Existing taxpayers for Composition Scheme, should not file in GSTR-1 or GSTR-3B for the tax period of 2020-21. Filing in GSTR-1 or GSTR-3B shall be considered as not registered for the Composition Scheme. To continue with the Composition Scheme, the taxpayer need not re-opt to avail the Composition Scheme as it avails automatically. Note: This shall apply only during the lockdown period. After the ban of the lockdown period, the below-mentioned procedures shall apply. For more details on the notification, Scroll down: The Central Government, on the recommendations of the Goods and Service Tax Council, had announced the new GST filing and payment procedure for dealers who are availing the benefits of Composition Scheme. In order to implement this procedure, the Central Board of Indirect Taxes has issued a notification no. 21/2019 – Central Tax dated 23rd April 2019. This notification incorporates the quarterly tax payment and annual return filing procedure for taxpayers who opted for the 6% composition scheme. In this article, we will look at the Tax Filing Procedure for Composition Scheme Dealers in detail.

Importance of this Initiative

This initiative of the government will act as an incentive for small and upcoming businesses to accept a composition scheme without any fear of compliance

• Bringing relief to composition scheme taxpayers under the GST, the Government has allowed such dealers to file “self-assessed tax” return every quarter in a simplified form. 
• Composition taxpayers will be relieved from the burden of filing detailed and cumbersome quarterly returns which would now be filed only on an annual basis.

GST notification No.21/2019 is reproduced below for reference:

Applicability 

The following persons are eligible to follow this particular procedure for furnishing of return and payment of self-assessment tax.

• The registered persons paying tax under the provisions of section 10 of the Central Goods and Services Tax Act, 2017
• The person availing the benefit of 6% composition scheme (Notification of Ministry of Finance, Department of Revenue vide No. 02/2019– Central Tax (Rate), dated the 7th March 2019)

Know more about the 3% GST Rate Scheme

Section 10 of CGST Act

Section 10 of the Central Goods and Services Tax Act (GST), 2017 describes the concept of Composition levy. The small dealers and business can opt for the composition scheme known as composition levy. Under this composition scheme, a composite taxpayer pays tax only at a certain percentage of his/her turnover. Know more about the Composition levy

Composition Scheme

Under the composition scheme, the taxpayer pays tax only at a certain percentage of turnover. Small business and manufacturers with a turnover of Rs 1.5 crore need to pay 1% GST, while service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh required to pay 6% (3% CGST + 3% SGST) tax on all supplies.

Quarterly Tax Payment

The Central Board of Indirect Taxes and Customs (CBIC) has notified the simplified "statement for payment of self-assessed tax" in the FORM GST CMP-08 to be filed by the dealers who have opted for composition scheme, under which business have to pay a lower tax on their turnover.

Form GST CMP08

The form GST CMP08 will include the details of outward supplies, inward supplies attracting reverse charge including import of service, tax, interest payable, taxes and interest paid.

Due Date

The form CMP08, which has to be filed by the 18th day of the subsequent month following the end of a quarter. 

Annual Return Filing

The small taxpayer had to use a form known as GSTR-4 when they filed tax returns every quarter if they have opted for composition scheme. According to the Central Board of Indirect Taxes and Customs notification, the composition taxpayers will now file GSTR-4 annually.

Due Date

According to the Central Board of Indirect Taxes and Customs (CBIC) notification, composition taxpayers will now file GSTR-4 annually by April 30 for the previous financial year ending March 31st.

Conclusion

• The composition scheme dealers will file the April-June quarter returns in July as per the notification.
• Traders who have not opted for composition scheme have to file GST returns every month and also have to pay taxes as per the GST slabs decided for the goods and services they deal in.

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