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Convert regular GST to composition
Convert regular GST to composition: To convert regular GST to composition scheme in India, you need to follow the below steps:
1. Log in to the GST portal (www.gst.gov.in.
(http://www.gst.gov.in/)) using your registered credentials.
2. Go to the “Services” tab and select “Registration”.
3. Click on “Application to opt for composition levy” option under the “Amendment of Registration Core Fields” section by clicking on it.
4. Fill in the required details such as the effective date of composition levy, the turnover for the current financial year, and other relevant information.
5. After filling in all the necessary details, you need to submit the application.
6. The GST authority will review your application and may request additional information or clarification if needed.
7. If the application is approved, your registration will be converted to a composition scheme.
It is important to note that once you opt for a composition scheme, you will have to pay a fixed percentage of your turnover as tax and will not be able to claim input tax credit. Also, you must satisfy the eligibility criteria for composition scheme, such as a threshold turnover of up to Rs. 1.5 crores in the previous financial year for most businesses (except for some specified businesses).
FAQs:
1. What is the GST Composition Scheme?
Ans: The Composition Scheme is a simplified GST scheme for small businesses, allowing them to pay a fixed percentage of their turnover as tax instead of following regular GST filing and compliance procedures.
2. Who can opt for the Composition Scheme?
Ans: Businesses with an annual turnover of up to ₹1.5 crores (₹75 lakhs for certain special category states) can opt for the Composition Scheme.
3. How do I switch from regular GST to the Composition Scheme?
Ans: To switch, you must file Form GST CMP-02 on the GST portal before the start of the financial year and inform the tax authorities about your intention to opt for the Composition Scheme.
4. When can I opt for the Composition Scheme?
Ans: The option to switch can be exercised at the beginning of a new financial year, and it remains applicable throughout that financial year.
5. Do I need to reverse ITC (Input Tax Credit) when switching to the Composition Scheme?
Ans: Yes, you must reverse the input tax credit on the stock held on the day immediately before opting for the Composition Scheme.
6. What are the tax rates under the Composition Scheme?
Ans: Tax rates under the Composition Scheme are 1% for manufacturers and traders, 5% for restaurants (not serving alcohol), and 6% for service providers.
7. Can I collect GST from customers under the Composition Scheme?
Ans: No, businesses under the Composition Scheme cannot collect GST from their customers.
8. What are the compliance requirements under the Composition Scheme?
Ans: Businesses are required to file quarterly returns using Form CMP-08 and an annual return using Form GSTR-4.
9. Can I avail Input Tax Credit (ITC) under the Composition Scheme?
Ans: No, businesses under the Composition Scheme are not eligible to claim Input Tax Credit.
10. Can I switch back to regular GST after opting for the Composition Scheme?
Ans: Yes, you can opt out of the Composition Scheme and switch back to regular GST by filing the necessary forms on the GST
For further details access our website https://vibrantfinserv.com
To Visit https://www.gst.gov.in/
