Have you understood the GST norms well yet? Do you know whether you qualify for Composition Scheme? Are you a regular taxpayer? No matter what business you are doing, you definitely need to have a regular track record of complying with tax payments and norms to avoid legal troubles in future. This is exactly why you need to understand GST compliance and things you need to do if you are under Composition Scheme.

GST was rolled out a few months ago and ever since its inception the traders have found it difficult to understand the working structure, of this One Nation One Tax plan of Govt. of India.

Composition Scheme

So who is a composite dealer? If your business has an annual turnover of fewer than Rs.1.5 crores and if your company deals in trading, manufacturing, catering (restaurant) then you are eligible for the Composition Scheme. This makes you a composite dealer, and you are required to file your GST only on the quarterly basis.

Here are a few tips for composite dealers to better understand their GST compliance:

•          You are liable to file returns ONLY on taxable entities. Flat tax rates on all the items all together are not applicable to you. To calculate your taxable income, you must explicitly categorize the items as taxable or non-taxable.

•          Once you have identified your taxable turnover you need to apply the applicable flat tax rate to calculate the GST returns you need to file.

•          Instead of tax invoice, you must generate the “Bill of supply” without charging GST whenever you sell your items.

•          Being a composite dealer, you are required to file GSTR-4 wherein you need to provide proof such as invoice details for all purchases made from registered dealers, purchases attracting reverse charges, purchases made from unregistered dealers, import of services, and credit and/or debit notes details which have been issued or received, either from registered or unregistered dealers.

•          From 1st April, an e-way bill for transporting goods worth more than Rs.50, 000 will become mandatory in all the states without any exception.

The above facts may highlight how important it is to keep a record of each transaction you do and the complexity of tax returns demands you to use software that is GST compliant. Proper records will ensure that you file GSTR-4 without any major issues. File your liable returns on time!