Composition Scheme Eligibility in India: Key Factors for Businesses

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Evaluating Composition Scheme Eligibility: Key Factors You Must Know

The Composition Scheme under GST offers a simplified tax compliance process for eligible small businesses in India. But is your business a good fit for this scheme? Here at Resolute Tax Attorneys, a team of expert GST lawyers, we can help you determine your eligibility and make informed decisions.

Evaluating Composition Scheme Eligibility: Key Factors You Must Know

Understanding Turnover Limits

The primary factor for composition scheme eligibility is your business's annual turnover. The current limits set by the government are:

  • ₹1 crore for businesses supplying goods or services, or both.
  • ₹50 lakhs for businesses engaged solely in supplying services.

Exceeding these limits disqualifies you from the scheme, requiring you to migrate to the regular GST filing system.

Beyond Turnover: Other Considerations

While the turnover limit is crucial, several other factors influence the suitability of the composition scheme for your business:

Nature of Purchases:

  • If your business makes minimal purchases attracting Input Tax Credit (ITC), the flat tax rates under the composition scheme can be advantageous.

Compliance Costs:

  • Compare the potential tax savings under the composition scheme with the cost of hiring a tax professional for regular GST compliance.

Choosing the Right Path

The decision to opt for the composition scheme requires careful consideration of your specific circumstances. Here's how Resolute Tax Attorneys can assist you:

Expert Analysis: Our GST lawyers will assess your business's nature, turnover projections, and purchase patterns.

Tailored Advice: We'll provide a clear picture of the advantages and disadvantages of the composition scheme compared to the regular GST scheme.

Strategic Planning: We'll help you develop a long-term tax compliance strategy that aligns with your business goals.

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Don't Go It Alone

Navigating GST regulations can be complex. Consulting a qualified GST professional like those at Resolute Tax Attorneys ensures you make informed choices regarding your composition scheme eligibility and overall tax compliance strategy. Contact us today for a consultation.