The CBIC has issued revised Frequently Asked Questions (“FAQs”) on Composition Levy to provide clarification regarding the meaning of composition levy, specified rate, eligibility criteria, payment of tax, etc. Some important FAQ on which clarification was made by the department are as hereunder:-
Q. What is composition levy under GST?
Ans: The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 75 lakhs ( Rs. 50 lakhs in case of few States). The objective of the composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax at a normal rate.
Q. How will the aggregate turnover be computed for the purpose of composition?
Ans: Aggregate turnover will be computed on the basis of turnover on an all India basis and will include the value of all taxable supplies, exempt supplies, and exports made by all persons with the same PAN, but would exclude inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.
Q. Are monthly returns required to be filed by the person opting to pay tax under the composition scheme?
Ans: No. Such persons need to electronically file quarterly returns in Form GSTR-4 on the GSTN common portal by the 18th of the month succeeding in the quarter. For example return in respect of supplies made from July 2017 to September 2017 is required to be filed by 18th October 2017.
The Complete set of FAQs can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2020/03/FAQs-on-Composition-Scheme.pdf