Try to understand the case in a fresh way.
The case is that the composition supplier of goods, where
there is a limit of 1.5 crore, who are those people?
The traders who supply the goods, the manufacturers, and
one service provider, who is a restaurant service provider.
Are any services being covered in this?
No.
If you are a service provider, then you have to go to the
composition supplier of services, where there is a limit of
1.5 crore.
Both these things are different now.
This point is clear, isn't it?
Now, try to understand this case practically.
For example, there is a lady's suit shop.
There is a saree shop.
Or there is a cloth seller, or a supplier of clothes, where
people go to buy clothes.
So, what is he doing in his shop?
First of all, he is selling you the goods.
He is selling the clothes, the suit.
This is the first point.
The first point is that he is selling the goods.
And the second point is that he is giving you some services.
I am telling you a practical case.
For example, if you go to buy a lady's suit, he just shows
you the cloth.
He gives you the cloth.
You take the money and he gives you the cloth.
Then he says to you,
Madam, our tailor is sitting here in-house.
You tell him your size.
He will stitch it and give it to you in a day or two.
The tailor is sitting in-house.
So, assume that the shopkeeper is getting covered in the
composition scheme of goods.
Assume that he is getting covered in the composition scheme
of goods.
Sir, how will he supply the services?
He is supplying the services of the tailor.
And there are some businesses where goods are also being
supplied.
And services are also being supplied.
And they are bundled naturally.
They can be done separately with great difficulty.
So, what will be done in this case?
He is a composition supplier of goods.
Keep this in mind.
He is a trader.
He is not a supplier of services.
So, in this case, how will he cover the taxation point of
users?
This is what I want to ask you.
Will someone be able to tell me how to do this?
Sir, this is a practical problem.
A person is providing services with goods.
And there is a chance that he is a composition supplier of
goods.
So, he can only provide services of a restaurant.
A person cannot provide services to women.
If you want to provide services, then you will have to come
under the composition scheme of services.
There are very few services.
So, what is the solution to this problem?
Sir, the government has told us that the solution to this
problem is that the composition supplier of goods
We think that the person who is selling goods must be
providing some services.
He must be providing some services.
So, the solution to this problem is to set a limit.
It is a good thing that you are selling goods.
It is a good thing that you are registered as a composition
supplier of goods.
But still, if you want to supply certain services up to a
certain amount, up to a marginal amount, we would give you
permission for that.
A limit has been set.
And what is the limit?
It is limited to 10% of turnover in preceding year.
Or, 5 lakhs whichever is higher.
Look at it.
10% of turnover in the preceding year or 5 lakhs whichever
is higher.
The government has set a limit for those who are
composition suppliers of goods and want to supply certain
services.
There was a turnover of 1 crore last year.
First, tell me whether I am eligible to come under the
composition scheme.
The answer is
Yes.
Can I supply certain services now?
Yes.
What is the maximum? 10% of turnover means 10 lakhs.
Or 5 lakhs whichever is higher.
So, I can supply services up to a maximum of 10 lakhs.
The point is clear.
Sir, what will happen if I supply more than 10 lakhs?
What will happen if I supply services of 11 lakhs instead
of 10 lakhs?
If this happens, then in that case, strictly, you will have
to leave the composition scheme.
This is a simple point.
In that case, you cannot stay under the composition scheme.
These are very strict limits.
You have to follow these limits.
In every case.
If there is 10% of turnover, then maximum 10% or 5 lakhs
whichever is higher, if you stay within those limits, then
you will be left in the composition scheme.
And as soon as you leave this limit, you will be removed
from the composition scheme.
You will be in the normal scheme.
You will have to show your returns on a monthly basis.
You will have to pay taxes on a monthly basis.
This is the point.
Marginal supply of services.
Come, let's do some reading.
Let's finish this.
Look, Fundamentally, the composition scheme is for goods.
That can be availed for goods and only one service.
Restaurant service.
But there are some cases where a manufacturer, trader, is
engaged in supply of services other than restaurant
services.
Though the percentage of such supply is very small.
There may be cases where a restaurant service provider is
also engaged in supplying small percentage of other
services.
So, for this, with a view to enable such tax payers to
avail the benefit of composition scheme, we have brought a
limit of 10% of turnover in the preceding year or 5 lakhs
whichever is higher.
Okay? This is the limit.
For example,
Ram Sevak is engaged in supply of goods.
And turnover in the preceding year is 60 lakhs.
Since his aggregate turnover does not exceed 1.5 crore
rupees, he is eligible for composition scheme of goods.
And in the current year, he can provide some services.
And how much can he provide? 10% of 60 lakhs or 5 lakhs
whichever is higher.
Simple point.
And as soon as his supply exceeds 6 lakhs,
Ram Sevak will have to leave the composition scheme.
Then he cannot remain in the composition scheme.
Okay, sir?
Shall we move ahead?
Look, son,
I am putting a lot of effort.
I am trying my best to make you understand.
I am putting a lot of effort.
Because I am a worshipper of effort, sir.
I always believe that those who try never lose.
If not today, then tomorrow you will definitely get the
result.
Just keep trying continuously.
Work smartly.
Don't stop. Don't give up.
As they say, don't stop my religion, walk my glory.
That's it.
Let's talk about the conditions.
What are the conditions of composition levy?
It's a simple topic.
He is not engaged in the manufacture of paan masala,
tobacco, aerated waters, ice cream.
He doesn't manufacture all these things.
Did you understand?
What is the second condition?
He shall pay the tax under reverse charge on inward supply
of goods or service.
If someone procures reverse charge services, purchases from
unregistered people, buys things, he himself is registered.
Even if he is registered for composition, he is registered.
He is registered for composition scheme.
Even if he is registered for composition, he is registered
in GST.
He is a registered person in GST.
If he purchases goods from unregistered people, it becomes
his responsibility to pay tax on the basis of reverse
charge.
He cannot run away from this responsibility.
He is neither a casual taxable person nor a non-resident
taxable person.
Can he issue an invoice?
Can he issue a tax invoice?
In which it is written that the sale of goods is this much,
CGST is this much,
SGST is this much.
Can he issue an invoice?
Think about it and tell me.
If I give you a wrong answer,
I will hit you right here.
I have told you many times
that he cannot collect tax from customers.
When I cannot collect tax from customers, what should I do
by issuing a tax invoice?
When my customer cannot claim his ITC on the goods he
purchases from me.
What will he do by issuing a tax invoice?
Sir, the concept of tax invoice does not work here.
He does not have to issue a tax invoice.
He has to issue a bill of supply.
When he issues a bill of supply, he will shout and say that
he is a composition taxable person and I am not eligible to
collect any tax on my supplies.
Why should he shout and write like this?
He has to write like this so that he does not make a
mistake.
He is a composition taxable person.
He knows that
I am not eligible to collect tax. Tax can't be collected,
but the customer doesn't know about it.
All the customers don't know about GST.
Let's say he has printed a fake tax invoice.
He has printed a book of tax invoices.
And he is cutting it and giving it to the customer.
You have got a sale of one lakh rupees.
And give me eighteen thousand rupees in the name of GST.
And the money in the name of GST is coming after this.
And he is depositing it in his bank account.
Because ideally he can't collect it.
Now if he collects it by fooling a customer, then what can
we do?
The government has gone mad.
He can't collect the tax for no reason.
He has made a fake bill book.
He has put his entrance in the fake bill book.
That the sales are of this much and GST is of this much.
Give me GST.
The customer is a simple man.
He doesn't know whether it is a composition or a normal one.
He has given GST.
He doesn't want to collect GST.
He will take all this money to his home.
In this case, the government has said,
Don't do such stupid things.
Make a simple bill of supply.
And write on the bill of supply that
I am a composition taxable person.
I am a dealer of composition scheme.
And I am not eligible to collect any tax on supplies.
Now if he writes on the bill of supply, then what tax will
the customer give him?
He won't give, right?
He won't give.
This is the point.
See, this is the type of format.
Bill of supply.
This is our bill of supply.
This is the type of format.
And you will see, he has not collected any tax anywhere.
He has not collected any tax anywhere.
He shall mention the word composition taxable person on
every notice.
Every notice, any signboard displayed at the prominent
place.
At his principal place of business.
And every additional place.
He will put it on the board of the shop.
He will directly write that
I am a composition taxable person.
If you purchase anything from me, then you don't have to
pay any tax.
This has to be written on the board.
It is not that you collect tax from the customer for no
reason.
You don't have to deposit anything to the government.
And take the money to your home.
Don't do this.
Okay? Show that you are a composition taxable person.
Okay, sir?
Sir, tell me one thing.
When do I have to opt for a composition?
You are saying that I have an option.
When do I have to opt?
Sir, you have two options.
The first option is when you are registering for the first
time.
When you are registering for the first time, at that time,
when you become eligible for registration, then you have to
write on the registration form that you don't have to give
me the normal registration.
You have to give me the composition scheme.
You have to give me the registration in the composition
scheme.
The date by which the registration will be effective, the
date by which your scheme will also be effective.
Case no. 1.
Case no. 2.
The second case is
The second case is that you are already a registered person.
You are already a registered person.
Your turnover is 40 lakhs in a year.
Your turnover is 60 lakhs in a year.
Yours is 1 crore in a year.
You took registration thinking that
I will do more sales.
I will do sales of 5-7 crores instead of 1.5 crores.
I will collect the output tax.
I will adjust it with the ITC.
I will deposit the net tax.
But your turnover is not increasing.
Your turnover is increasing.
You are facing a lot of compliances.
You are a normal taxpayer.
You have to file monthly returns.
You have to deposit taxes from time to time.
If there is an assessment case, then the problems are
different.
What will you do?
How will you do?
Sir, in that case, you will think that my turnover has gone
down by 1.5 crores.
Should I go back to the composition scheme?
Should I leave the regular scheme and go to the composition
scheme?
Do I want to go?
Can I go?
The answer is yes.
You can go.
But before the financial year starts,
I will have to take an application.
Before that, I will have to request that I want to come to
the composition scheme leaving the regular scheme.
Please give me permission to come to the composition scheme.
When the financial year starts, you will start applying to
the composition scheme.
Take a look at the chart.
You will understand.
The date from which your registration is effective, the
person who is taking the registration for the first time
and wants to come to the composition scheme for the first
time, when he will give the application for your
registration, he will mention in the application that he
wants to come to the composition scheme.
The date from which your registration is effective, your
composition scheme will be effective.
For the regular person,
I will have to give the application at the beginning of the
financial year.
From the beginning of the financial year, my composition
scheme will be effective.
Is this point clear?
Now look at the validity of this point.
How long will the composition scheme remain valid?
Till then it will remain valid.
Otherwise, my turnover will not exceed.
As soon as my turnover exceeds 1.5 crores, my composition
levy will stop being valid.
Then I will have to come to the regular scheme.
I told you in the last lecture that as soon as my turnover
exceeds 1.5 crores,
I will come to the regular scheme on a compulsory basis.
The provisions of the regular scheme will start applying on
me.
It is also possible that the conditions that I have given
for the composition levy are not satisfied.
If the conditions are not satisfied, then I will come to
the regular scheme.
In that case,
I will have to file an intimation.
In that intimation, I will say that these are the reasons
why I am getting out of the composition scheme.
Either my turnover has exceeded 1.5 crores or the
conditions that I have given for the composition levy are
not satisfied.
In that case,
I will file an intimation.
I will file an intimation within 7 days on the GST portal.
In that intimation,
I will say that this is the reason why I am getting out of
the composition scheme.
In that case,
I did not come to the officer's notice.
But I came later.
In that case, where the proper officer has reason to
believe that the registered person was not eligible to pay
the tax under the composition scheme, he will issue a
show-cause notice.
Show-cause notice means the reason.
The reason is why your registration is not valid.
When the reason is given, what will happen to the receipt
of reply?
Either he will accept the reply or deny the option to pay
the tax under the composition scheme.
These are the general points.
Look at this point.
It says that, as I told you an example,
Reliance Industries or I told you a big example,
Mumbai had a turnover of Rs.
50 lakhs,
Haryana had a turnover of Rs.
25 lakhs,
Delhi had a turnover of Rs. 50 lakhs.
In that case, when we were looking at the turnover, all the
branches were clubbed and their aggregate turnover was
being seen.
Now this point says that, when you come under the
composition scheme, you cannot do this that one of your
branches comes under the composition scheme and the other
branch comes under the regular scheme.
This is not possible.
All of your branches either stay in the regular scheme or
all of your branches stay in the composition scheme.
It is not possible that some are in this and some are in
that.
No. Either say horse or horse.
That's it.
Either stay in the composition scheme or come under the
regular scheme.
Do it together.
All registered persons having the same pen have to opt for
the composition scheme.
If one registered person opts for the normal, others become
ineligible for the composition scheme.
This is the point.
We have studied this.
Tax cannot be collected.
And when tax cannot be collected, it is obvious that
whoever is purchasing from this person,
he must not have given tax to this person.
And when that person has not given tax to this person, this
person will be able to claim the input tax credit.
How will he do it?
He has not paid the tax.
What is Info Tax Credit?
I am paying tax at the time of purchase,
I am paying GST, I am taking credit for that.
The person who is buying from me, who is buying from the
Composition Scheme, has he paid the tax?
On his own purchases?
No, he has not.
Because it is written here that the Composition Scheme
person cannot collect the tax.
So sir, my buyer, the buyer of the Composition Scheme will
not be able to collect the tax on his own purchases.
You can also be fined if you have made an irregular avail
of your Composition Scheme.
If a taxable person has paid the tax under the Composition
Scheme, though he was not eligible, the person would be
liable to a penalty under Section 73-74 of the CGST Act.
These are the points of the Composition Scheme.
Small and medium, small and medium businessmen, to give
them relief, this scheme was brought.
There was a limit of Rs. 1.5 crores for goods.
Then for services, we saw a limit of Rs.
75, no, Rs.
50 lakhs.
Rs. 1.5 crores and Rs. 50 lakhs.
Then we saw that if all the branches total their turnover,
to check the limit of Rs.
1.5 crores.
If it is not possible that one branch opts for Composition,
the other branch opts for regular.
If you want to opt, opt for all, if not, opt for none.
There were some conditions.
What are these conditions?
Conditions are that the manufacturer should not be from Pan
Masala Tobacco.
Issue a bill of supply.
Wherever you have a board, write that I am a Composition
taxable person.
In the case of services, the rate is 6%.
And in the case of goods, the rate is 1%.
And in the case of restaurants, the rate is 5%.
You cannot collect tax from the customers.
You cannot take the input of your purchases.
If there is a case of reverse charge, it will be imposed on
you.
If you buy goods from an unregistered person, you have to
pay tax on it.
There are many simple points, basic points.
And the chapter was also very simple.
It was a long chapter.
In the future, you will have clear points.
Composition schemes are very useful.
In the future, if you want to open your own business, you
will not have a business worth crores of rupees.
In the beginning, you need less compliances.
So you will need a scheme at that time.
That is why I am teaching you this scheme.
In the next lecture,
I will meet you with a new topic.
Till then, take care of yourself.
Love your parents a lot.
Your parents are your God.
It is said that no one in this world has seen God.
God cannot be present everywhere.
That is why they sent their parents.
Sometimes we find their words very bitter.
Why did they say that?
But whatever they say, let's assume that it is the voice of
God.
And it is a true voice.
They want the best for you.
So never misbehave with them.
Listen to what they are saying.
Always listen to them.
They are the ones who want your success in life.
No one else wants your success.
A father is a person who is happy when he sees you moving
forward.
When you move ahead from your father in life, he is the
only person who is happy.
No one else is happy.
No one can see you moving ahead from yourself.
Except your parents.
That is why I am saying, love your parents.
There is no friendship in life.
Only your parents are important.
Till then, Namaskar Friends.
Radhe Radhe.