Composition Scheme - Concept & Eligiblity

1. Composition Scheme Concept and Eligibility
  • It is a special scheme for tax-payers whose aggregate turnover in preceding financial year did not exceed a specified threshold limit. The limit for tax-payers for various states are as follows.
  • Single PAN Clause: Benefit of composition is avaiable only when all the registered entities under a single Income tax PAN opt for such a levy.
  • It is a choice for the taxpayer to opt for compostion scheme & not a compulsion.

Turnover Limits

  • Aggregate Turnover = Taxable supplies + Excempt supplies + Exports + Inter-State supply by the person(excluding Central, State, UT, Integrated tax & Cess)
  • Aggregate Turnover excludes the value of inward supplies on which tax is payable by a person on reverse charge basis

# 11 special category states are Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Uttarakhand and Himachal Pradesh, Jammu and Kashmir