Should I register under the Composition Scheme in GST?
When the aggregate turnover of a business exceeds the threshold limit of registration under GST, they need to take a compulsory registration. Such business can take benefit of the Composition Scheme under GST. It is a voluntary scheme under which there is less compliance.
It is important to note that a business must fulfil certain conditions to opt for registration under the composition scheme.
To analyse whether a business should register under the composition scheme or not, the following factors should be considered:
|Opt for GST Composition Scheme||Opt for GST Regular Scheme|
|Nature of Customers||Goods or services are supplied to unregistered dealers or composite dealers who are not ready to pay GST||Goods or services are supplied to registered dealers who are ready to pay GST|
|Claim Input Tax Credit||Business does not wish to claim input tax credit since the majority of purchase is from unregistered dealers or composite dealers||Business wishes to claim the input tax credit of GST paid on purchases from registered dealers|
|Type of Sales||A business making only Intra-state sales i.e. sales within the state of registration||A business making Inter-state sales i.e. sales outside the state of registration and exports|
|Goods or Services||Business dealing in the sale of taxable goods or restaurant services||Business dealing in the sale of non-taxable goods or services other than restaurant services|
|E-Commerce Sales||The dealer has no plans to sell goods or services online through an e-commerce portal||Dealer plans to sell goods or services online through an e-commerce portal|
|Record Keeping||Business wants to avoid record keeping and accounting||Business can maintain accounting and record keeping|