Composition Scheme

GST Composition Scheme The Composition Scheme is a simplified tax mechanism under GST designed for small taxpayers. It allows them to pay taxes at a fixed, lower percentage of their turnover and significantly reduces compliance burdens like filing detailed monthly returns. Example A small retail shop owner with an annual turnover of ₹80 Lakhs opts for the scheme. Instead of standard GST, they pay a flat tax rate (VERIFY: 1% of turnover) and file a simple quarterly statement rather than monthly returns. When it matters in practice Ideal for small businesses with turnover below the limit (VERIFY: ₹1.5 Crores) seeking low compliance costs, though it restricts them from claiming Input Tax Credit or making inter-state sales. Related terms - Regular GST Scheme - Input Tax Credit - Turn-over Limit Related Service GST Registration