COMPOSITION SCHEME

F.1 — Composition trader (goods) in Delhi

Facts: Delhi trader with annual turnover Rs. 1 cr opts for composition under s. 10 CGST.

Computation / Steps:

Step 1. Composition tax: 1% combined (0.5% CGST + 0.5% DGST) of turnover.

Step 2. Annual composition tax = Rs. 1 cr × 1% = Rs. 1 lakh.

Step 3. Quarterly payment + Annual Return.

Step 4. No ITC available.

Step 5. Cannot make inter-State outward supplies.

Step 6. Cannot supply through e-commerce operator (where deemed-supplier framework applies).

Step 7. Cannot collect tax from customer.

Step 8. No Compensation Cess applicable (s. 8(1) proviso GST Compensation Act).

Result: Composition framework — 1% tax + no ITC + restrictions on inter-State/ECO supplies.

F.2 — Composition restaurant in Delhi

Facts: Delhi standalone restaurant with annual turnover Rs. 80 lakh opts for composition.

Computation / Steps:

Step 1. Composition tax for restaurant: 5% combined (2.5% CGST + 2.5% DGST).

Step 2. Annual composition tax = Rs. 80 lakh × 5% = Rs. 4 lakh.

Step 3. Quarterly payment + Annual Return.

Step 4. No ITC available.

Step 5. Cannot make inter-State outward supplies.

Step 6. Cannot supply via Zomato/Swiggy post-01.01.2022 under ECO deemed-supplier framework (those become Zomato's supplies).

Step 7. Cannot collect tax from customer.

Result: Restaurant composition — 5% tax. Post-01.01.2022, ECO supplies excluded from composition.

F.3 — Composition service provider (extended via DGST Amendment Act III + parallel CGST)

Facts: Delhi consulting firm with annual turnover Rs. 30 lakh opts for composition (post-amendment service composition).

Computation / Steps:

Step 1. Per CGST Amendment Act 2018 + DGST Amendment Act III — composition extended to services.

Step 2. Threshold Rs. 50 lakh; tax 6% combined (3% CGST + 3% DGST).

Step 3. Annual composition tax = Rs. 30 lakh × 6% = Rs. 1.8 lakh.

Step 4. Subject to similar restrictions as goods composition.

Step 5. No ITC; quarterly payment; Annual Return.

Result: Service composition (post-amendment). Higher rate 6% reflects service margins.

F.4 — Composition taxpayer exiting threshold

Facts: Delhi composition trader crosses Rs. 1.5 cr threshold mid-year.

Computation / Steps:

Step 1. Liable to register under regular scheme from date threshold crossed.

Step 2. File intimation in Form GST CMP-04 within 7 days.

Step 3. Transition to regular tax framework — CGST + DGST per goods rate + ITC.

Step 4. Stock transition framework — Form GST ITC-01 for ITC on stock on date of transition.

Step 5. Period before crossing — composition tax; after — regular tax.

Result: Composition exit triggers regular registration + ITC transition framework.