Composition Scheme for Service Providers

The composition scheme for small service providers gives an option to taxpayers rendering services (or mixed Suppliers) having aggregate annual turnover up to Rs. 50 lakh to pay tax at 6%.( i.e 3% CGST and 3% SGST)

Decisions taken by the GST Council in its 32nd Meeting for including Services in Composition Scheme.


1.) The said Scheme Shall be applicable to both Service Providers as well as Suppliers of Goods and Services, who are not eligible for the presently available Composition Scheme for Goods.

2.) The Council agreed to the proposal to simplify the Composition sc heme by providing for quarterly payment of tax and filing of only one return in a year with effect from 1st April/ 2019.

However, there are certain limitation which are continued on Composition Taxpayers:

1.) The taxpayer cannot claim ITC for paying GST.

2.) The taxpayer cannot collect tax from recipient of Goods/Services.

3.) The taxpayer cannot supply Inter state.

4.) Goods held in stock on the appointed day had not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State.

5.) The Important part is person opting under this scheme shoul pay 6% 0f GST on all its supplies (i.e Goods and Services) not only Services.

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