Recent Changes in Composition Scheme Under GST ( Happy GST Series - 03) by CA Rajender Arora

Recent Changes in Composition Scheme Under GST ( Happy GST Series - 03) by CA Rajender Arora

Recent Changes in Composition Scheme Under GST ( Happy GST Series - 03)

Composition Levy is governed by Section 10 of CGST Act, 2017 read with Rule 7 of the CGST
Rules, 2017, wherein the provision of this section overrules the entire act including charging section
of CGST Act, 2017 i.e. Section 9 except Sec. 9(3) & Sec. 9(4) i.e. RCM related provisions i.e. RCM
under Sec. 9(3) & Sec. 9(4) shall be duly discharged by the composition dealer. And provide by its
ambit special rates of taxes by certain taxpayers and very low rate without ITC availability so that the
complexity of the act do not affect the small taxpayers covered in the scope of the Composition
Levy.

Now for notifying the rates, Rule 7 of the CGST Rules, 2017 have been amended vide
Notification 50/2020-CT dated 24 th June 2020, thereby issuing a new table of rates along with
respective category of taxpayer & applicable Section and sub-section, the same has been
summarized below:

S.No
. Section No. Category of Taxpayer

Revised
Rate

1
Section 10(1) &
Section 10(2) of
CGST Act' 2017

1. Manufacturers
2. Except certain goods manufacturer notified*

CGST/
SGST-
0.5%**

2
Section 10(1) &
Section 10(2) of
CGST Act' 2017

1. Supply of food, drink (Except alcoholic liquor) or other article
along with its services
2. For cash, deferred payment or other valuable consideration.

CGST/
SGST-
2.5%**

3
Section 10(1) &
Section 10(2) of
CGST Act' 2017 Other Supplier except as mentioned in S.No.1 & 2 above

CGST/
SGST-
0.5%***

4
Section 10(2A) of
CGST Act' 2017

Registered persons not eligible under the composition levy under
sub-sections (1) and (2), but eligible to opt to pay tax under sub-
section (2A), of section 10

CGST/
SGST-
3%****

*Manufacture of following notified goods are not eligible for composition scheme
 Ice cream and other edible ice, whether or not containing coco
 Pan masala
 Aerated Water
 All goods, i.e., Tobacco and manufactured tobacco substitutes

**of the turnover in the State or Union territory
***of the turnover of taxable supplies of goods and services in the State or Union territory
****of the [turnover of] supplies of goods and services in the State or Union territory