Frequently asked questions
How is my ITC calculated if I migrate from the normal tax scheme to the composition scheme?
When a business owner migrates to the composition scheme, they must pay an amount equivalent to the value of the inputs held in stock on the day immediately before the migration. Any ITC remaining in the credit ledger after this payment will be lapsed . The business owner should file form GST ITC-03 for the credits to be carried forward to the composition scheme.
If I own multiple businesses registered under a single PAN, do I have to register them all under the composition scheme?
Yes, if you have multiple businesses, you’ll have to register them all under the composition scheme. You can’t register some of your businesses under the composition scheme and pay taxes under the normal tax scheme for others.
Can composition dealer avail ITC for the goods/services that I purchase/sell?
No, a compounding vendor cannot claim ITC on the goods or services that they purchase or sell.
Can I opt for the composition scheme at any time of the year?
No, a business owner can only register for the composition scheme during the beginning of the financial year (by filing form GST CMP-02).
What is the tax rate under the composition scheme?
The composition rates are different based on the type of business:
- For traders & manufacturers - 1%.
-For the restaurant sector - 5%.
Can a composition dealer collect tax from their customers?
No, a composition dealer cannot collect tax from their customers.
Yearly Package – GSTR 4 (For Dealer under Composition Scheme)
Dealer registered under Composition scheme? Get this plan to and let our experts manage your GST compliances for the whole year.
- GSTR-4 filing for four quarters ( i.e. filing of B2B invoices, B2C details) for one GSTN no.
- This plan doesn’t include book keeping or accounting
- Persons registered under composition scheme
- Purchase/Sale Registers
- Tax registers such Input Tax register, GST Payable Register
- Tax Challan showing GST Liabilty discharged
| Plan Charges | 2799 |
| Goods & Services Tax (GST) | 504 |
| Total Cost | 3303 |
* Estimate Time for Service Completion
365 Days
How is my ITC calculated if I migrate from the normal tax scheme to the composition scheme?
When a business owner migrates to the composition scheme, they must pay an amount equivalent to the value of the inputs held in stock on the day immediately before the migration. Any ITC remaining in the credit ledger after this payment will be lapsed . The business owner should file form GST ITC-03 for the credits to be carried forward to the composition scheme.
If I own multiple businesses registered under a single PAN, do I have to register them all under the composition scheme?
Yes, if you have multiple businesses, you’ll have to register them all under the composition scheme. You can’t register some of your businesses under the composition scheme and pay taxes under the normal tax scheme for others.
Can composition dealer avail ITC for the goods/services that I purchase/sell?
No, a compounding vendor cannot claim ITC on the goods or services that they purchase or sell.
Can I opt for the composition scheme at any time of the year?
No, a business owner can only register for the composition scheme during the beginning of the financial year (by filing form GST CMP-02).
What is the tax rate under the composition scheme?
The composition rates are different based on the type of business:
- For traders & manufacturers - 1%.
-For the restaurant sector - 5%.
Can a composition dealer collect tax from their customers?
No, a composition dealer cannot collect tax from their customers.