Good morning, good evening, good afternoon to everyone who
is watching this live.
Welcome to our very fresh and fresh lecture.
The name of this lecture is Composition Scheme.
Today we will discuss a little about the Composition Scheme.
What exactly is it?
For what purpose has it been brought?
What is its purpose?
Who does it apply to?
And what exactly is it?
These are a few things that we will discuss today.
But before we start the discussion,
I just want to say a few things that came to my mind.
Whether you reach your destination or not, is a matter of
fate.
But I shouldn't even try.
This is wrong, isn't it?
Ever since we started our classes, we have covered a lot of
topics.
And I have only said one thing in every lecture, that no
matter how intelligent or financially secure you are, it
doesn't matter.
More than IQ, more than ever, what is important is,
I can.
I can see your passion.
I can see your attitude towards problems.
What is your attitude?
If you have a positive attitude, a positive mindset, that
no matter what happens in life, no matter what happens in
front of me,
I will overcome it.
You have that confidence, that it's okay.
There is a problem.
I accept this problem.
That it's okay.
We respect the problem.
But at the same time, the more we respect the problem, the
more we respect our self-confidence.
We know that no problem is higher than our status.
Your status is not measured by your pocket.
Your passion is measured by your status.
A person who has a passion, even if he has no money, he
will start his business from there.
And a person who doesn't have a passion, even if you make
him sit in the sky, he will start from there.
Passion, attitude, this is what matters in life.
Nothing else matters.
If you have the knowledge, and you combine it with your
attitude, with your passion, you don't know where you will
end up.
They say, the desire to reach the destination is already
there.
The desire to reach the destination is already there.
Now we will drown ourselves in this fire.
Difficulties say that we will be killed.
And courage says that we will see.
Always keep this attitude, that whatever comes, we will see.
No one can take me away from my destination.
They say that Arjun, the one who used to be Arjun in
Mahabharata, says that I can only see the eyes of a bird.
I can't see the problems around me.
I can only see the eyes of a bird.
Just keep the eye of a bird as your objective.
Keep that mentality in your life.
You will never be able to solve your problems.
If we have problems, then we also have solutions for them.
In this world, there is a subject called Mathematics.
And that Mathematics has taught us something or not, it has
taught us that every problem has a solution.
Every question has an answer.
Just keep this in mind.
There is no bigger problem than your attitude in life.
There has never been a bigger problem than your heart.
The phase of life passes.
Come, let's start the chapter of Composition Scheme.
Composition Scheme is a great topic.
And the purpose of bringing it was also very unique when
the government brought it.
Sir, as you know, once you are registered in GST, then you
are burdened with compliances.
You have to file monthly returns.
You have to pay taxes on a monthly basis.
Whatever taxes you have taken.
You have to give details of the input tax credit you want
to claim on a monthly basis.
Compliances increase a lot.
And as soon as the compliances increase,
I have to serve a professional person, like a Chartered
Accountant.
And that Chartered Accountant will not come for free.
He will take money for that as well.
Sir, he is a CA.
He will not come for free.
He will take money for that as well.
So what happens with that?
A lot of expenses of businessmen goes on the basis of
compliances.
The businessman who is doing business worth 100 crores, 200
crores, 500 crores, he has no problem.
That businessman has no problem.
He is running such a big business.
Even if he pays 1-2 lakhs, what difference does it make?
It doesn't make any difference.
But sir, think about that poor brother of that country,
who is running a small business, let's say a small shop,
let's say he is running a shop in Parchun.
Someone is selling goods on a cart.
Someone is running a stall.
Think about that poor brother of mine.
There is an old woman, a widow, who is running a small shop
to feed her children.
Let's open a Parchun shop in her house.
I will earn 500-700 thousand rupees a day.
I will pay the children's fees with that.
Does this happen?
You go to the streets, they have a small stall in their
house.
Someone is selling tea.
Because these people are also supplying goods and services.
They are covering the definition of supply.
They are working for the business.
They are supplying something.
And you are giving them money and consideration.
So, this is also supply.
This is also supply.
Obviously, GST will be imposed on them too.
And as soon as GST provisions are applicable on them, they
will fall into the same loop.
They will have to file monthly returns.
They will have to show their input tax credit statement.
They will have to pay monthly taxes.
They will also have to bear the burden of all the
compliances.
They will also have to take professional services.
Tell me, keep your hand on your heart.
A person who is running a business to earn his two meals a
day.
A person who has no money in his pocket.
He is earning 500-700 thousand rupees a day.
A person who is earning 500-700 thousand rupees a day to
feed his children.
A person who is suffering a lot.
A person who is earning money by getting abused a lot.
Does it suit our government to trouble such a person?
A person who is running a small business.
He will keep going to the CA's office.
To file my returns.
The CA will take 2000 rupees.
And he will take it every month.
This poor person is earning 500-300 rupees a day.
Does it suit our government to insult our poor brothers and
sisters like this?
To trouble them like this?
Does it suit our government?
Should they get any relief or not?
Just tell me this much.
Look, the GST and other compliances.
The big businessmen don't have any problem anyway.
They don't have any problem in paying even 200,000 rupees.
But our small businessmen.
Who are running small shops.
Who are selling tea.
Who are doing anything.
Do they have enough money to go to the CA's office and pay
them?
To meet the lawyers?
Suppose the assessment case is opened.
Do they have enough money to go and pay the lawyers?
Sir, they don't have.
Will you bring such people from a good country?
Will you trouble them?
Will you make them suffer?
Does it suit you to collect GST by breaking their bones?
No, sir.
What to do?
Should they get any relief or not?
They are small businessmen.
Do they get any relief?
Yes, obviously yes.
So, to give them relief, a new provision was brought.
The composition scheme.
What does the composition scheme say?
It says that last year, in the preceding financial year, if
your turnover is up to 1.5 crores,
What did I say?
I said that if your turnover is up to 1.5 crores, last
year, and there are some special category states where the
turnover limit is of 75 lakhs,
then if your 1.5 crores or 75 lakhs,
if you run your business in special category states, if
there is a turnover of 75 lakhs here, and in normal states,
there is a turnover of 1.5 crores last year,
then you become eligible to take your registration under
the composition scheme.
You become eligible.
This is the eligibility criteria.
So, we will say that he is a small business man.
So, what are the benefits?
The benefit is that the tax payment is not paid every month.
It is paid quarterly.
In this case, the tax payment is paid quarterly.
You have to pay tax every quarter, and the return will go
on an annual basis.
So, our compliances are reduced here.
Sir, but I will have to calculate the output tax and input
tax.
Even then, there will be some compliances.
Even then, my time will be wasted.
Even then, I will be spending some money on that thing.
In the calculation of output tax and input tax?
No, sir.
You don't have to do any calculation of output tax and
input tax in the composition scheme.
Because they have fixed some rates.
They have fixed some rates.
They have made three categories of people.
What are those three categories?
They have told that one is a trader.
A trader like a shopkeeper.
Like some other garments, like the clothes of small
children.
I brought the goods from the back and kept it in my shop
and supplied it to the front.
He has become a trader.
So, three categories have been made.
The first category is a trader.
The second category is a manufacturer.
And the third category is a service provider.
Otherwise, you can say that the person who is providing the
services of a restaurant.
The person who is providing the services of a restaurant,
a manufacturer and a trader.
These three people have a turnover of less than 1.5 crores.
The turnover of last year was less than 1.5 crores.
They can come here.
The rates of these three will also be different.
The rates of these three will be different.
That means whatever they supply, at a particular rate, at a
particular rate, GST will be imposed on them.
At a particular rate, their GST,
their GST will be imposed on them.
But, they cannot take input tax credit.
These are very simple, nominal rates of 1-2%.
These are very nominal rates.
They cannot claim input tax credit.
If they have purchased something from somewhere, by paying
GST, they purchase something and bring the goods.
So, the GST that they have paid, they cannot claim input
tax credit for that.
It is obvious that if they cannot claim input tax credit,
then there is no point of output tax.
So, they cannot collect output tax from the customers.
Neither will they collect output tax from the customers,
nor will they be able to take credit for the taxes they
have paid during the purchase.
They do not have to collect anything, nor do they have to
set off anything.
So, what is the meaning of these rates?
You are saying that there is a trader, a manufacturer, a
restaurant service provider.
You are saying that particular rates of GST are imposed on
them.
So, what is the meaning of those rates?
When I cannot collect anything from my customers, then how
can I pay these rates?
Sir, you will have to pay these rates yourself.
You have to pay these rates yourself.
These are not very big rates.
These are rates of 1-2%.
If you come forward, I will tell you.
Whatever sales you do, you come under the composition
scheme.
For example, you do sales of 1 crore in the entire year.
You are eligible for the composition scheme.
Last year, there was a turnover of 1 crore.
This year also, there was a turnover of 1 crore.
Are you eligible?
Yes.
For example, you are a trader.
You do not have to do anything.
You have done a sale of 1 crore.
You do not have to collect any tax from your customers.
To do that sale, you purchased goods worth 75 lakhs.
And you purchased it by giving GST.
So, the GST that you gave during the purchase, you do not
have to claim any input or claim for that.
Now, what you have to do is, the sale of 1 crore that you
have done, if you get a rate of 1%, then you do not have to
do anything.
You have to deposit 1 lakh rupees from your pocket to the
government as tax.
You do not have to collect from anyone.
You do not have to set off from anyone.
You have to deposit from your pocket.
You cannot collect, sir.
If you are a registered person, and you are buying goods
unregistered, then the provisions of reverse charge will
still be applied on you.
So, these were some basic brief points, which I explained
to you.
Now, I just told you one thing, that it is a matter of
opening the envelope.
So, I have just opened the envelope.
I have taken out the stapler pins, as I always say, so that
it becomes clear in your mind, what is a composition scheme.
Now, when we start it, then you will not face any problem.
Let us start reading it.
We have talked a lot.
Let us see what exactly it is.
Look at the overview of this.
The composition levy is an alternative method of levy, of
tax, designed for small tax payers, whose turnover is up to
the prescribed limit.
Why was it brought up?
For simplicity.
Initially, the scheme was designed to benefit small traders
and manufacturers, and restaurant service providers.
But later, it was also decided that there is a service
provider.
Just now, as I told you, there was a restaurant service
provider.
There is a restaurant service provider,
there is a trader, there is a manufacturer.
Only that is being covered in the composition scheme.
But later, the normal service providers, like someone is
providing hair styling services,
someone is providing hair cutting services, there are such
types of services.
Someone is running a beauty parlour, they are providing
services for that.
So later, the government also covered the service providers.
And this is also right.
You are covering the goods providers, you are covering the
manufacturers, you are covering the traders.
You are covering the goods providers, who are supplying
goods.
Has the supply of service providers committed any sin?
Have they committed any sin with you?
When you are giving so much benefit to the goods providers,
then my younger brother, who is supplying services, a poor
brother, he is supplying services, someone is cutting hair,
someone is providing hair styling services.
Why are you not covering that here?
So, to cover that also, the government brought provisions.
It says that, however,
however,
supplier availing composition schemes were permitted to
supply other services.
And later, fundamentally it was for this.
Later, for service providers also, we brought this point.
Just a minute.
This is the point.
Later, you will read that, this composition scheme,
this has also started being applied for services.
And a little bit, the goods guys, who are selling goods,
we also told them a limit, that okay, you are supplying
some goods, and you are coming under the composition
scheme, but that doesn't mean that you will keep on
supplying goods.
A little bit of services, you too, a little bit of
services, you too can supply.
Principally, you are supplying goods.
But a little bit, if you want to give some services, then
you can give that also.
For that also, we have set a limit.
That is what this point is telling.
Service providers have all together become different.
We will also read about that.
What he is saying, he is saying that, this scheme,
fundamentally, was for supplier of goods, but however,
subsequently, suppliers are willing, composition scheme,
were permitted to supply other services up to a specified
value.
Look at this.
Supplier of goods have the option to pay tax at the rate of
1%
of the turnover.
And restaurant service provider has to pay tax at 5%.
Small tax payers, whose turnover is up to 1.5 crores, are
eligible in this.
Okay.
We had read this once.
And this is for our services.
Look at this.
Person engaged exclusively in the supply of services, other
than restaurant services, is not eligible for goods scheme.
The supplier of services, if the supplier of services
wants, that I also want to come in composition scheme, then
all together, we have made a separate section.
He should not go there.
He should not go in 10-1 and 10-2.
He should go here.
What does he say?
In order to provide benefit of composition scheme, to
person engaged in supply of services, who is doing supply
of services,
like a barber,
an architect,
is doing supply of services, can be a photographer.
These are small people, who are doing supply of services.
Some have become dentists.
Now they are doing supply of services.
So, they have also been brought in composition scheme.
So, in order to provide the benefit of the scheme, for
supply of services people,
what is said for them?
That their turnover in preceding financial year should be
up to Rs.
50 lakhs.
Like there was a turnover of 1.5 crores,
then you were eligible for composition scheme.
The turnover here, that turnover is of Rs.
50 lakhs.
If last year, you are a service provider, last year your
turnover was up to Rs.
50 lakhs, then this year, this scheme will be applied on
you.
Same provisions are there.
You can't collect tax, you can't claim input tax credit.
Month on month, this problem of filing returns,
This will also give you freedom, this will also give you
liberation, sir.
But we will still impose a small rate on you.
There, they were imposing a rate of 1% and 5% on them.
They were goods people.
The rate that will be imposed on you, how much will it be?
Sir, that rate will be 6%.
6% of the turnover.
This is the point, sir.
There are two points.
One is the goods that are being supplied and the other is
the services that are being supplied.
This is what we are reading.
We have divided the goods category into three categories.
Trader, Manufacturer and Restaurant Service Provider.
They have different rates.
Service providers have different rates.
Here it is written that there should have been a turnover
of 1.5 crores last year.
And here in the service category, if you had a turnover of
50 lakhs last year, then you will be covered here.
Sir, assume that I did not have a turnover of 1.5 crores
last year.
I had a turnover of 10 crores.
I sell goods and I had a turnover of 10 crores last year.
I am from Haldiram.
I am from Bikaner.
I had a turnover of 100 crores last year.
Or assume that we are talking about a service provider.
I am a big film star.
I am an Amitabh Bachchan.
I had a turnover of 500 crores last year.
I do supply and service.
Now, you are talking about 50 lakhs.
You had a turnover of 50 lakhs last year.
And you are saying that a turnover of 1 crore is 50 lakhs.
What will happen to me, sir?
What will happen to me?
I am worth more than 1.5 crores.
I am worth more than 50 lakhs.
What will happen to me?
Sir, nothing will happen to you.
You will have the same GST as Manjure.
And Manjure's GST was that if you go beyond the limit of
1.5 crores or 50 lakhs,
then the normal GST provisions will be applied on you.
You will have the same GST as Manjure.
If you go beyond the limit of 1.5 crores or 50 lakhs,
then the normal GST provisions will be applied on you.
The normal GST provisions will be applied on you.
The normal GST provisions means that the output that you
are supplying,
the sales that you are doing, the tax that will come on it,
you have to collect it, claim its ITC and deposit the net
tax.
You have to pay monthly returns.
You have to show all these things in your statement.
How much did you purchase?
How much did you do?
To whom did you sell?
Net?
What is my tax liability?
The month on month compliances will be applied on you.
But still, if you are below 1.5 crores or 50 lakhs,
then the provisions that will be applied on you,
that is what we are discussing with you.
Come here.
Sir, it is a very important chapter.
If you have to open your business,
if you have to open your business,
suddenly you will not be able to work for 10 crores a year.
You will slowly increase.
It is possible that in the first year you will be working
for 10 lakhs.
After that, in the next year, you will be working for 20
lakhs.
After that, you will be working for 40 lakhs.
Slowly, slowly a person increases.
When he climbs the stairs, suddenly, slowly he climbs the
stairs.
If you jump and hit, then the bones will break and the
pants will also tear, sir.
Slowly, slowly you move forward in life.
Now, when you will get into the business in the starting,
then in the starting itself,
when you will take registration in GST,
your compliances will increase for no reason.
Your compliances will increase for no reason.
At that time, you will need a composition scheme, sir.
If you come in the composition scheme,
the cost of your compliances will definitely reduce, sir.
Because of this, reading this chapter becomes a little
important.
From the point of view of business, sir.
Come here.
What does it say?
Look, sir.
He has told the same thing that I was telling you.
Two types of schemes are going on in the composition.
10-1 and 10-2 section, which talks about goods.
And 10-2A, which talks about services.
Okay.
It talks about turnover, sir.
10-2A and 10-3, look.
There, he has told that in the case of goods,
we need a turnover of 1.5 crores.
Now, in the case of services, I am telling you the 50 lakh
one.
Look, what is he saying?
In the case of goods,
the turnover limit for the composition levy of goods
has been increased from 50 lakhs to 1.5 crores.
And 75 lakh rupees in respect of special category states.
These are the special category states.
Arunachal Pradesh.
For example, if your shop is in Arunachal Pradesh
and you want to come in the composition scheme, then you
will not see the limit of 1.5 crores,
you will see the limit of 75 lakhs.
If in the last year,
the turnover of your business is of 77 lakhs,
so if it becomes of 77 lakhs,
then in that case,
you will have to take a normal registration in GST this
year.
The provisions of the composition scheme cannot be applied
on you.
Why not? Because you are a person from a special category
state.
In GST,
the government has specified,
differentiated the states.
That these are the states,
where there is a limit of this much.
And these are the special category states.
We have given them a special category.
If you do business with special category states,
then the limit that should be applied on you,
that limit becomes different.
And under this,
in the normal states,
the limit of 1.5 crores was there,
but here the limit is of 75 lakhs.
These are the special category states.
See, which states are there?
Arunachal Pradesh, Uttarakhand,
Manipur, Meghalaya,
Mizoram,
Nagaland, Sikkim, Tripura.
Is there a name of Haryana in this?
Is there a name of Maharashtra?
If you do business in Maharashtra,
then in the case of goods,
in the case of goods,
it is 1.5 crores.
If you do business from Delhi,
in the case of goods,
it is 1.5 crores.
But if you do business from Nagaland,
then in the case of goods,
it is 75 lakhs.
If you have a turnover of 76 lakhs last year,
if you have a turnover of 76 lakhs last year,
then in that case also, you have to take registration.
You don't have to take in the composition scheme.
You have to take registration
in that case,
you will take normal registration.
See,
they say Assam,
Himachal Pradesh and Jammu Kashmir.
Assam,
Himachal Pradesh
and Jammu Kashmir.
However, they have been given the same rank
as the special category states.
They are also considered special category states.
If they are considered special category states,
then they should also be given
a limit of 75 lakhs.
They should be given a limit of 75 lakhs.
You just said that
the normal one is 1.5 crores,
and the special category one is 75 lakhs.
If they are special category states,
then they should also be given 75 lakhs.
Sir, they should not be given.
They should not be given.
This Assam,
this Himachal Pradesh,
this Jammu Kashmir,
these are special category states.
I agree,
people heartily accept this
that they are special category states.
But here,
the revenue of travelling
is very high.
Many tourists come here.
And it is the tourists
because of whom the turnover
and revenue of these states
is higher than other special category states.
You see,
Himachal Pradesh,
Shimla,
Chandigarh,
they all come to Himachal Pradesh.
And you see,
people go to Manali, Kullu Manali.
How much tourism is there here?
How much revenue of these states is there?
So, it is obvious that
if I give them 75 lakhs,
then there will be unnecessary trouble.
There will be unnecessary trouble.
Do you know the meaning of 1.5 crores?
1.5 crores means
a monthly sale of 12.5 lakhs.
Now,
if someone is selling jewellery or anything else,
where there is more tourism
and travelling,
he can easily sell
12-13 lakhs per month.
If someone is a hotel owner
in Shimla, Manali,
or a restaurant service provider,
he can easily sell
12-13 lakhs per month.
So, in that case,
setting a limit of 75 lakhs
will be a little wrong
because many businessmen
will be covered in the normal scheme.
So,
the purpose of tax compliances
is to increase
the ease of doing business.
This purpose gets defeated.
So,
Assam, Himachal Pradesh, Jammu and Kashmir,
although they are in the special category states,
although they should have been
within the limit of 75 lakhs,
but
the limit has been increased for them.
The limit of 1.5 crores
has been set.
This is the point.
Take a look.
Take this.
Try to understand from the chart.
1.5 crores for all the states
and for the rest of the special category states,
there is a limit
of 75 lakhs.
Take a look.
Take a look for the service providers.
A hairstylist,
for the service providers,
there is a limit of 50 lakhs
for the service providers.
This is the point.
There is a hairstylist,
her name is Billu Barber,
and her friend,
a film star,
his name is Sahir Khan.
Do you remember that film? Sir, it was a great movie. I
have seen it when I was a kid. Billu Barber.
Shah Rukh Khan and Irrfan Khan's great movie.
Although it was not a big hit.
But if you want to see Irrfan Khan's acting, you must watch
this movie.
Although Shah Rukh Khan is also a great actor.
But in this movie, Irrfan Khan's role, it is said that he
bit him raw.
Sir, he bit Shah Rukh Khan raw.
One day I must watch this movie.
The name of this movie is Billu Barber.
See what it says.
There is a hairstylist, Billu Barber.
He has a salon in Delhi and Haryana.
And he is doing intrastate supplies.
So in order to determine whether Billu is eligible to take
the benefit, turnover of both the salons will be taken into
account.
Now let's talk about this a little further.
What does it say?
It is basically talking about the definition of turnover.
Let's go to the definition of turnover.
The child has a doubt.
Sir, you are talking about 1.5 crore turnover, 1.5 crore
turnover, 1.5 crore turnover.
What is to be taken in this turnover?
Because it is also very easily possible that a person is
also doing taxable supplies from his shop.
He is also doing exempt supplies.
It is also possible that he is also exporting.
So what is to be taken in turnover?
What should be included? What should be excluded?
See the definition of turnover once.
Because the definition of turnover is very useful.
In fact, in CA exams, you get the question of turnover of
4-5 numbers.
I had come in my exam.
Tell me, these are all the details.
Now you tell me, what will be the turnover of this person?
And according to this turnover, tell me, can this come in
the composition scheme?
And children also do wrong there.
See once what happens, aggregate turnover.
The turnover we are talking about 1.5 crore, 50 lakhs, what
is to be taken in that?
It is the sum of value of outward supplies.
Taxable supply comes.
Taxable supply is the supply on which tax is applied, GST
is applied.
Exempt supply comes on which GST is not applied.
Exports are also included in this.
Interstate supply is also included.
Interstate supply means a person from Haryana.
And suppose someone is doing sales in Maharashtra, then
those sales will also be covered here.
But what is to be done from this minus?
See this.
What is to be done from this minus?
It is a very simple concept.
Till now what have we discussed?
Discussed about composition scheme.
And discussed about turnover.
We are discussing about turnover.
What exactly is it?
Add taxable supplies.
Add exports.
Add interstate.
What is to be done from minus?
First see this.
Taxes including CESS paid under GST.
Means you have paid CGST.
You have paid SGST.
You have paid IGST.
Minus that.
From your turnover.
Minus taxes.
And value of inward supplies on which tax is payable.
On reverse charge basis.
You have made some purchases.
May be you have made a purchase from an unregistered person.
Because of that reverse charge provisions have been imposed
on you.
And you have deposited taxes.
We had read this in reverse charge chapter.
So if there is something like this.
Then you can minus those inward supplies from here.
They will not become a part of your turnover.
Taxes and the purchases of reverse charge.
The inward supplies.
These two things will never become a part of your turnover.
After that the net you will have.
Means taxable, export, exempt.
Minus this.
The net will be left.
That will become a part of your turnover.
This is the point.
See now.
See this.
If you want to understand from the chart.
Then see from the chart.
What does include do?
Taxable, exempt, export, interest rate.
And what does minus do?
You have given some taxes.
You have given some inward supplies.
Sometimes it may happen that you have given some loan to a
person.
Some loan or advance.
Because it happens in business.
You are running a business, running a shop.
A person comes to you.
Brother, I need 10 lakhs.
You give me a loan.
Give me a debt.
You said.
That Jagyashneer Grover inside you.
He said.
Look, listen.
You don't know how to do business.
You don't know what is business.
I give you a debt.
I will give you a debt of 10 lakhs.
And I will take 12% interest from you.
Now what is this?
In a way, it is a supply of service.
You gave him the loan.
The advance you have given to that person.
This is also a supply of service.
In return for that, the interest you are taking.
That has become a consideration.
So, should we include that thing in the turnover?
Should we include that thing in the turnover?
Sir, include that thing in the turnover.
Don't even do it by mistake.
Because it is written here.
Excludes the turnover.
Value of exempt supply of service.
By way of extending deposits, loans, etc.
As the consideration is represented by way of interest.
If you are taking interest on the loan.
Then remove that service from here.
Is the point clear?
What are we reading?
Sir, we are reading the chapter of composition scheme.
What is composition scheme?
The turnover of 1.5 crore last year.
If any person who is selling goods.
And in the case of the service person.
If that turnover is up to 50 lakhs.
Then in that case.
He does not have to take the registration of normal GST
this year.
He can easily take the registration of composition scheme.
In that case, he will get the benefit.
That he does not have to worry about ITC, etc.
Does not have to file a month on month return.
There will be some specified rates on it.
Like traders, manufacturers.
1% rate.
If it is a restaurant service provider.
Then 5% rate.
If it is a service person.
Whose turnover is up to 50 lakhs.
Then 6% rate.
These are some rates.
Which he will deposit from his own pocket.
Do not try to collect from the customer.
Then it will be better.
Point no.
We were discussing.
What is aggregate turnover?
What exactly is aggregate turnover?
What should be included in this aggregate turnover?
And what should be excluded?
Because there can be a problem.
For example, if you do not have the knowledge of this.
Then it is possible.
That your turnover is sitting.
1 crore 47 lakhs.
And you can also come in the composition scheme.
But there was a mistake in your calculation.
Something had to be minused.
You forgot to minus that.
And you are showing your turnover.
1 crore 51 lakhs.
And as soon as 1 crore 51 lakhs will be there.
You will be covered in the normal scheme.
The benefits of the composition scheme.
You do not have to file the monthly return.
Compliances have been reduced.
Do not have to see anything of ITC output tax.
Those benefits.
Will not reach you.
That is why I am trying to teach.
That in aggregate turnover.
What all comes.
What all does not come.
In aggregate turnover.
Taxable supply will come.
Exam supply will also come.
Exports will come.
Interstate supply will also come.
But there is a new point.
What does the new point say?
That all these supplies.
You have to take all the branches.
You do not have to take one business separately.
Look at what it says.
Taxable, exempt, export.
Of persons having same PAN.
To be computed on.
All India basis.
You have a shop in Mumbai.
From there you earn.
The annual turnover is 50 lakhs.
You have a shop in Delhi.
From there also you earn 50 lakhs.
And you have a shop.
For example in Haryana.
From there you earn 25 lakhs.
Now my question to you is.
Champions just tell me this thing.
The aggregate turnover you will see.
Will you see it separately?
And will you see it separately?
This is my question to you.
Who will tell me?
The one who will tell me.
Right now.
I will pay you 2000 rupees.
Will anyone try to tell me?
The aggregate turnover we are talking about.
Do we have to see it separately?
Or do we have to see it together?
What do we have to do?
Sir, what does provision say?
Provision says to include all these things.
Whose? Of persons having same PAN.
Why did he say same PAN?
Sir, we are talking about GST.
GST is indirect tax.
Here also GST is included.
GST's registration number.
So where did this PAN come from?
PAN is linked to income tax.
That is about income tax.
So where did it come from?
Where did it come from, sir?
What are you doing, sir?
Why are you spending income tax on GST?
Till now we were not able to understand GST.
You have also included income tax in it.
Son, try to understand me.
What I am trying to say is.
In GST we had read somewhere.
That the registration you have to take.
In every state you have to take different registration.
I have read it. If you have five shops in five states,
different in Haryana, different in Kerala, different in
Tamil Nadu, different in Delhi, different in Jammu and
Kashmir, then you have to take five different registrations
of five states in GST.
Is there such a thing in income tax?
Will there be different registrations of different states
in Reliance Industries' income tax?
Or will there be only one PAN number of the company?
Sir, income tax is the tax of the central government.
Why don't you understand this?
Income tax is the tax of the central government.
What will you do by separating it?
There is only one central government in the country, that
of BJP.
There is only one central government.
So, your PAN will remain the same.
But your GST registration is state-specific.
Every state's government needs revenue.
Delhi's government needs money. Haryana's government needs
money.
That is why you have to take state-wide registration.
So that you can show in every state that my state's
government…
See, I have got so much revenue in this state.
According to that revenue, your state gets so much money.
What we do is CGST and SGST.
The SGST tax will go directly to the state government.
Every state's government has to pay me.
As a tax.
Every state's government needs money.
That is why our GST registration is state-specific.
PAN is central-specific.
In a country, if you run a company, you have only one PAN
number.
Even if you open 1000 branches, your PAN number will remain
the same.
What is he saying?
He is trying to say that these things will come in the
outward supply of persons having the same PAN.
To be computed on an all-India basis.
So now tell me, I was the only person here.
I was the only person.
And when I am the only person, is it possible that my GST
registration will be of different states?
Mumbai's, Delhi's, Haryana's. This is absolutely true.
But will my PAN number be different?
The PAN will be the same.
So now when I calculate the aggregate turnover.
Now when I calculate the aggregate turnover.
Whether I have a composition scheme of 1.5 crore or not.
So to calculate 1.5 crore, I have to look at the
calculation on an all-India basis.
Not every state's calculation.
Why? Because he is saying that take out all these things of
persons having the same PAN.
That too on an all-India basis.
If I talk about GST registration.
This is different, this is different, this is different.
But the PAN number is the same.
This is the same, this is the same.
The PAN number is the same.
Some branches of Reliance Industries are in Delhi.
Some branches are in Kerala.
Some branches are in Bengal.
GST registration can be different.
But the PAN number will be the same.
When the PAN number will be the same.
Then you will have to combine the turnover of all the
branches.
Your turnover comes out here.
1 crore 25 lakh rupees.
The total limit was 1.5 crore.
So my brother, this year you can come in the composition
scheme.
This is the point.
This is the point, sir.
This year you can come in the composition scheme.
See this point, sir.
Person having same PAN.
Everyone has PAN.
Everyone has the same PAN number of all the branches.
Total of all the branches.
The aggregate turnover will come.
Check that whether it is more than 1.5 crore or less.
If it is less, then the composition scheme is applied.
If it is more, then the normal scheme is applied.
Don't look at the turnover of branches separately.
Check the turnover of all the branches in the country.
Because you have to look at the PAN basis.
From 1 April till the date you apply for registration.
For example, we have a limit of 20 lakhs.
If your turnover is up to 20 lakhs this year.
Then you don't have to take any registration.
Whether it is composition or any other.
Suppose you start your business on 1 April.
And till 30 June your turnover is 20 lakhs.
Till 30 June you didn't take any registration.
Didn't cut any invoice.
When you didn't take registration.
Then how is the composition and normal?
Till 30 June you are working without GST.
But suppose in the month of October or November.
When you are doing business.
Suppose your business is 1 crore or 1.25 crore.
Then in that business.
Will the starting turnover be taken?
When you didn't have any registration.
The answer is yes, it will be taken.
The value of supplies made by the registered person.
From 1 April till the date he becomes liable for
registration.
That also has to be included.
I will explain in a while.
Hold it.
If you don't understand, no problem.
Hold it. I will explain further.
Hold it.
He is talking about rates.
There is a manufacturer.
Which manufacturer?
There is a manufacturer who makes clothes.
There is a manufacturer who makes bricks.
There is a manufacturer who makes plastic components.
And there is a manufacturer who makes cigarette tobacco.
There is a manufacturer who makes aerated water.
So, which manufacturers are covered?
Sir, look.
I am talking about normal manufacturers.
Manufacturers other than manufacturer of ice cream.
Other than manufacturer of pan masala, tobacco, aerated
water.
There are normal manufacturers.
So, half a percent of the state.
Because, see what he is saying.
Half a percent tax rate is in the state.
Just like SGST.
I told you once.
CGST also works.
If SGST tells you that my tax rate is half a percent.
CGST will also tell you that my rate is half a percent.
So, what will be the total rate in that case?
He is telling the rate of SGST.
He has not told the total combined rate.
If half a percent is the rate of the state.
If the rate of SGST is half a percent.
So, in CGST also the same thing will be written.
Cut base symbol.
Nothing else.
So, half a percent rate of CGST.
And what will be the total rate?
One percent.
Check it.
If there is a manufacturer.
Normal manufacturer.
Does not make pan masala, tobacco, etc.
So, the total rate of SGST is one percent.
That much tax will be collected by the government.
Do not claim any ITC on this.
Do not claim any ITC input tax credit on this.
And neither can you collect this tax from your customers.
You will have to collect it from your own pocket.
You will have to loosen your own pocket.
Check it.
If the rate of the restaurant is half a percent.
What will be the total rate in the state?
Five percent.
And if there is a normal supplier, like a trader.
So, what is the rate on that?
One percent.
Check it.
He is saying one percent of the turnover.
One percent of turnover.
Which you will earn in the whole year.
One percent of the sales you do.
Five percent of that.
Come on.
Check the example.
And because he is a manufacturer.
So, he has to pay half a percent tax in SGST.
Half a percent in SGST.
And the total has to be one percent.
Okay.
This is the turnover he is telling.
The turnover in the first quarter of the current year was
five lakhs and ten lakhs.
So, tell me how much tax do you have to collect?
It is one percent.
You will divide one percent into two parts.
SGST and SGST.
Half and half.
Tell me the total.
One percent.
What is the turnover of this year?
Five lakhs.
One percent of five lakhs.
Five thousand rupees.
What about the other branch?
Ten lakhs.
Ten thousand.
What is the total?
Fifteen thousand rupees.
Okay.
Let's move ahead.
Are you able to understand?
What we want to study?
What is the composition scheme?
For whose benefit is this scheme brought?
What is your benefit in this?
What is turnover?
Do you have to check each branch separately?
Or do you have to combine all the branches and check?
What are the limits of turnover?
What is the limit that as soon as I cross it,
I have to get out of the composition scheme and have to pay
tax in the normal scheme?
Are you able to understand these points?
These are the points.
Look at them.
What will be left in the case of services?
So in this case, sir, what we have read earlier, it is 6%.
Although it is said that the rate of Shalpaye tax is 3%.
But it is written in one act.
If we combine both, it is 6% rate.
CGST plus SGST is 6% rate in the case of the service
provider.
If you want to check the example of this, see that there is
Padmavati, runs a saloon, is in composition levy.
One branch is in Delhi, the other branch is in Gurgaon.
Total turnover of both the branches last year was of 45
lakhs.
What was the limit in this case, in the case of service? 50
lakhs.
What was the turnover last year? 45 lakhs.
So can it come in composition this year?
Answer is yes.
So it came in composition.
This year, what is the turnover of the first quarter? 5
lakhs for one and 10 lakhs for the other.
So if you want to take out the tax, take it out.
Put 6% on 5 lakhs and 6% on 10 lakhs.
Tax will come.
Put 6% on 5 lakhs and 30 lakhs and 6% on 10 lakhs.
Total tax will be 60,000.
Okay? Did you see? What happens?
How does it happen?
See an example.
This will be the last example from this example.
Things will be clear to you.
A photographer has started his business this year.
The name of the photographer is Champak.
And all the characters in this example are imaginary.
It has nothing to do with Jethalal and his episode.
So the name of a photographer is Champak.
I have not named him Chacha.
I am just saying Champak.
He has started his photography business this year.
Just stop it here.
Stop it here once.
Leave it here.
He has started a new business this year.
Pay attention to the words.
Has commenced.
If he has started his business this year, would there have
been a turnover last year?
Would there have been a turnover last year? Answer is no.
Can he come in compositions from the start of this year?
Last year there was no turnover of 50 lakhs.
So he can come.
When can he not come?
When there was a turnover of more than 50 lakhs.
But was it more than 50 lakhs?
He has started fresh this year.
He has started completely fresh.
So he can come in compositions from the start.
Look at this.
From April to June there has been a turnover of 20 lakhs.
And as soon as there is a turnover of 20 lakhs, he will
have to take registration. Let's try to understand this
from a timeline.
Look at this timeline.
Suppose this is April.
And this is April and this is June.
I start my business here.
Director, can you move this a little bit?
I start my business here.
So my turnover of 20 lakhs is up to here.
I have pulled a turnover of 20 lakhs up to here.
Now when I have pulled a turnover of 20 lakhs here, till
now I was working without taking registration. Because my
turnover was below 20 lakhs.
My turnover has become 20 lakhs.
The day my turnover reaches 20 lakhs, my mind will start
running.
I will have to think that I have to take registration.
But the question is, why should I take compositions in
registration?
The question is, why should I take compositions in
registration?
Or should I take this in normal?
He has thought that I will go in normal.
I have a new business.
I will go to the compliance and CA and give them money.
Let me do one thing.
I will come in compositions.
I can come up to 50 lakhs.
Once the turnover exceeds, then I will have to get out of
compositions.
I can come up to 50 lakhs.
Okay.
Let's wait for 50 lakhs.
Then he says that from July to September, my turnover has
become 30 lakhs.
From July to September, my turnover has become 30 lakhs.
Will my turnover be considered as 50 lakhs?
No, it shouldn't be.
If I ask you the total turnover, is it 50 lakhs or not?
I have earned 20 lakhs here.
I have earned 30 lakhs here.
My turnover of 50 lakhs has been achieved till September.
Now, there are two aspects of this coin.
Tell me, what will be the tension?
The first tension is that the turnover will be of 50 lakhs.
Tension is a good thing.
First of all, keep your mouth shut.
Not everything is negative.
Champak Chacha started a new photography business.
I didn't expect it to work, but it did.
And it worked so well that in just a few months, sales
reached up to 50 lakhs.
At the time of 20 lakhs, they must have thought of
registration.
It is possible to register in the
Composition Scheme for Services.
It is quite easily possible.
But we also read that if the limit is 1.5 crores, then the
limit of 1.5 crores will be the limit of this year as well.
How are you leaving this point?
If the limit was 1.5 crores last year, then the limit is
1.5 crores and 50 lakhs this year as well.
The limit is that as long as you are earning 1.5 crores
this year, if you are earning 1.5 crores this year or if
you are earning 50 lakhs in services, then the Composition
Scheme is applicable for you.
But as soon as you earn 1 crore, 50 lakhs, 1 rupee, this
year, turnover, then should you apply the Composition
Scheme or not?
This is the big debate at this time.
The government has given you 1.5 crores.
Tell them that you are a small trader.
We will give you relief.
But as soon as you go above 1.5 crores this year, you will
be forced to leave the scheme.
You will have to enter the normal system, the normal tax
structure.
You will have to file a monthly return.
You will have to collect tax on your sales.
You will have to take credit for input tax.
It is a very complicated point.
It is a very serious point.
It is a serious matter.
You will not say anything till 1.5 crores this year.
But as soon as you go above 1.5 crores, you will enter the
normal scheme.
I told you, didn't I?
I will keep telling you such things.
As soon as you think that the chapter is over, you will
understand. I will give you such a point, that your feet
will slip.
The sky will slide under your head.
Sir, I am talking about the turnover of last year.
How did you forget the turnover of this year? 1.5 crores,
you have to check this year also.
If you go above 1.5 crores, you will enter the normal
scheme.
This is the point.
Uncle Champak is getting tensed.
He is getting tensed that the turnover of 50 lakhs is here.
According to this rule, if I go above this, as it is said,
from October to December, the turnover is 20 lakhs.
So how will the tax be calculated? How will the tax be
calculated?
Tell me this.
Sir, this is the case.
This is the case.
Its treatment is also very simple.
Its treatment is that you don't have to do anything.
First of all, you don't have to take tension.
Its treatment is that check it one by one.
This 20 lakhs, you don't have to pay any tax till here.
Because you didn't even take the registration here.
What did you not take?
The government itself was saying that there is a limit of
20 lakhs. If you earn less than 20 lakhs, you don't have to
take registration.
And when you don't have to take registration, do you have
to pay any tax? The answer is no.
You don't have to pay any tax till now.
In this case, you don't have to pay.
Now come to the next.
The turnover of 20 lakhs touched here.
So I opted for the composition scheme.
And when I opt for the composition scheme for services, the
rate will be 6%. So how much tax will I pay on 30 lakhs? 6%.
Absolutely right.
I will keep giving 6% and save it.
I don't have to do any compliance.
And as soon as my turnover touches 50 lakhs here, as soon
as it touches 50 lakhs, now I have come to the normal rate.
Now the proper rate of 18% will be applicable on this one.
The rate of 18% will be applied properly here.
I am sitting here.
I am getting sad.
Look at it once and understand
Look at it.
Look at it. Try to read it.
What is the answer?
In the given case,
I have started a business.
So there was no turnover last year.
So I will be eligible for registration when the turnover is
more than 20 lakhs.
When I get registered in GST,
I will opt for the composition scheme for services.
I am getting 20 lakhs from FRL.
But I will exclude it for now.
Because if I don't get the registration, then what is the
tax for?
After that, the next 30 lakhs that will come, I have to pay
the tax on that 30 lakhs at the rate of 6%.
Which I have paid.
And when my turnover reaches 50 lakhs, But when I went
above 50 lakhs, now I am in a normal scheme, I am no longer
a small business man.
The government said, come back to normal, you are no longer
a small child, come back to a big class.
Now your days of writing with a pencil are over, start
writing with a pen, spend a little.
So when I went above 50 lakhs, in that case the normal rate
is 18%.
The rate will be applied on me.
Sir, this was the whole chapter of the composition scheme.
Now the rest is nonsense, just 5-7 minutes.
The bulk was 1.5 crores last year and 1.5 crores this year.
And what are those rates?
That's it.
See, who all can't come.
Sir, there are some services people who are giving such
things, goods or services, on which there is no tax, they
cannot come in the composition scheme for goods.
You are working in the interstate, selling goods from Delhi
to Haryana, interstate.
You cannot come in the composition scheme.
If you are providing services through an electronic
commerce operator, you cannot come.
If you are a manufacturer of pan masala or tobacco, you
cannot come.
You will have to come under normal tax.
Okay? If you are a supplier of services, then why are you
coming in goods?
If you are a supplier of services, then come in services.
Take this, come in this.
Come in service.
And the same points are there in goods.
Take a look.
Was there anything in this?
If you are an interstate supplier, then don't come in the
composition scheme by mistake.
If you are an interstate supplier, then you are a bigger
person.
You are doing interstate transactions.
You will get out of the composition scheme.
It may also happen that you are in the composition scheme
at this time.
But as soon as you do an interstate sales, you will get out
of the composition scheme.
Normal provisions will be applied on you.
But, as I always say, what is written in the law is the
same.
Is it written in this that you cannot purchase interstate?
Is it written anywhere?
I can purchase interstate.
I am a person from Delhi. I am a composition supplier.
I come in the composition scheme.
Can I purchase from Jammu and Kashmir?
The answer is yes.
I can purchase interstate.
But I cannot do interstate sales.
There is no restriction on the composition supplier to
receive interstate inward supplies on goods and services.
This is the point.
Sir, for now, I will stop this lecture here.
Otherwise, it will become a little long.
There are a few points.
I will cover them in the next lecture.
I will also revise them in the next lecture.
Till then, try to understand what exactly was in the
composition scheme?
Why was it brought?
Till then, thank you very much.