Turnover-Limit-for-GST-Composition-Scheme

GST Composition Scheme-Turnover Limit

Home » Learn » GST » GST Composition Scheme-Turnover Limit

GST Composition Scheme-Turnover Limit

GST Composition Scheme was designed to reduce the GST compliance burden for micro, small and medium enterprises (MSMEs). To enrol, the taxable person under GST must have an aggregate turnover of less than Rs.75 lakhs per financial year, in most cases. In this article, we look at the turnover limit for GST composition scheme in detail.

Turnover Limit Increased to Rs.75 Lakhs

The Ministry of Finance (MoF), Initially introduced the GST Composition Levy Scheme with a turnover limit of Rs.50 lakh. However, due to various representations, in the GST Council meeting held on 11th June 2017, the turnover limit for Composition Levy increased its limit from Rs.50 lakh to Rs.75 lakh for all eligible registered persons. Though the turnover limit was increased to Rs.75 lakhs for majority of the States, a few States as under have different turnover limits.

Further, the GST Council also recommended that in case of Uttarakhand, the turnover limit for Composition Levy for CGST and SGST purposes will be Rs.75 lakh.

Click here to read about Non-GST Goods and Service

Turnover Limit of Rs.50 Lakhs for the Special Category States

The GST Council has decided that following special category states will have a Rs.50 lakhs turnover limit for Composition Levy for CGST and SGST purposes.

  1. Arunachal Pradesh
  2. Assam
  3. Manipur
  4. Meghalaya
  5. Mizoram
  6. Nagaland
  7. Sikkim
  8. Tripura
  9. Himachal Pradesh.

For the State of Jammu & Kashmir the turnover limit for the Composition levy has not yet been decided and will be decided in due course.

Manufacturers NOT Eligible for GST Composition Scheme

The following manufacturers will not be eligible for the Scheme:

  • Ice cream and other edible ice, whether or not containing cocoa
  • Pan masala
  • Tobacco and manufactured tobacco substitutes

Rate of Tax under GST Composition Scheme

The GST rate of tax for those registered under the Scheme is as follows:

  • Manufacturers, other than manufacturers of such goods as may be notified by the Government – 1%
  • Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II – 2.5%
  • Any other supplier eligible for composition levy under section 10 and these rules – 0.5%

For GST registration, click here.

Other Related Guides

23rd GST Council Meeting – Changes to Compos... 23rd GST Council Meeting - Changes to Composition Scheme In the 23rd GST Council Meeting held on 10th November 2017, various measures to improve comp...
GST Form CMP-02 GST Form CMP-02 The Government has released an advisory dated 18th February 2020 to file Form GST CMP-02 for Opting-in Composition Scheme for Financ...
GST Return Filing – Composition Scheme GST Return Filing - Composition Scheme The GST Composition Scheme is designed to ease the compliance burden for MSME businesses by simplifying GST re...
GST Composition Scheme   GST Composition Scheme Composition Scheme acts as an alternative method for levying a tax under GST. Small businesses registered under the GS...
Opting In And Out Of Composition Scheme 2020-21 Opting In And Out Of Composition Scheme 2020-21 Due to the impact of Corona Virus, the lives of the people became highly unstable and the Governments...

Post by IndiaFilings

IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. Our aim is to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.