Increase in Threshold limit of Turnover for Composition Levy
/ GST (Goods & Services Tax)

Increase in Threshold limit of Turnover for Composition Levy

Government had increase threshold limit of Turnover for Composition levy from Rs.1 Cr to 1.5 Cr wide
notification no.‐14/2019‐Central Tax dated 7th March, 2019. This notification will come into effect
from 1st April, 2019.Now, any person having turnover up to Rs. 1.5 Cr. Can opt for paying GST under
composition Scheme. Let us discuss provisions related to registration under composition scheme
under GST.

What is Composition Scheme? Who can opt for Composition scheme?
A registered person under GST regime, if his aggregate Turnover does not exceed Rs.1.5 Cr.* in
preceding Financial year may opt to pay tax in lieu of tax payable by him under normal registration, a
fixed amount of tax calculated on the basis of turnover. Basically this benefit is for small taxpayer who
can avoid tax formalities by paying a tax at fixed rate of turnover.

*Earlier this threshold limit was Rs.1.5 crore which has been raised wide notification no.‐14/2019‐
central tax dated 7th March, 2019 which will be effective from 1st April, 2019.
But the threshold limit for registered person in the following states shall be Rs.75 Lakhs:‐

  1. Arunachal Pradesh,
  2. Manipur,
  3. Meghalaya,
  4. Mizoram,
  5. Nagaland,
  6. Sikkim,
  7. Tripura,
  8. Uttarakhand

Who cannot opt for Registration under composition Levy scheme?

  • Manufacturer of ice cream, pan masala, or tobacco
  • A person making inter‐state supplies
  • A casual taxable person or a non‐resident taxable person
  • Businesses which supply goods through an e‐commerce operator

Is service provider eligible for Registering under Composition Scheme?

Earlier Service provider was not eligible for registration under Composition scheme, but as per
Notification No. 02/2019‐central tax dated 29th January, 2019 CGST(Amendment) Act,2018 which was
effective from 1st of February,2019 Composition taxpayers are allowed to supply services (other than
restaurant services) ,for

  • up to a value of exceeding 10% of turnover in preceding Financial year or
  • Rs. 5 Lakh,
    whichever is higher.

For any query Click here.