GST Compliance for Composite Dealer

GST Compliance for Composite Dealer

📦 GST Compliance for Composition Dealers in India – A 2025 Guide
Running a small business and want to simplify your GST compliance? The GST Composition Scheme is designed just for that. It’s a hassle-free tax compliance option under GST for small taxpayers who want to avoid complex GST filings and reduce tax burden.
But even under this simplified scheme, certain compliances are mandatory to stay in good standing with the tax department.
In this 2025 guide, we’ll walk you through everything a composition dealer needs to know — eligibility, tax rates, filing returns, issuing invoices, and how our expert team ensures you stay 100% compliant with GST rules.

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📌 Who is a Composition Dealer?
A composition dealer is a small taxpayer registered under the GST Composition Scheme, which is covered under Section 10 of the CGST Act. It allows eligible businesses to pay tax at a fixed percentage of turnover and file returns quarterly, instead of monthly.
This scheme is best suited for:
•    Small retailers
•    Traders
•    Manufacturers (with some exceptions)
•    Restaurants (not serving alcohol)
•    Small service providers (within turnover limits)
✅ The key attraction is reduced compliance and lower tax rates.
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✅ Eligibility Criteria for GST Composition Scheme (FY 2024–25)
To register as a composition dealer, you must meet the following conditions:
Criteria    Details
Annual turnover limit    Up to ₹1.5 crore (₹75 lakh in select NE states)
Type of business    Traders, manufacturers, restaurants (no alcohol)
Service providers    Allowed if turnover is up to ₹50 lakh
No inter-state supply    Only intra-state supply allowed
Cannot supply through e-commerce operators    Like Amazon, Flipkart, etc.
Cannot claim Input Tax Credit (ITC)    ITC is not available under the scheme
📌 Composition dealers must mention "Composition taxable person" on all invoices and signboards.

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💰 GST Tax Rates for Composition Dealers (2025)
Business Type    GST Rate
Manufacturers (non-notified goods)    1% (0.5% CGST + 0.5% SGST)
Traders or Dealers    1% (0.5% CGST + 0.5% SGST)
Restaurants (non-alcohol)    5% (2.5% CGST + 2.5% SGST)
Service providers (optional scheme)    6% (3% CGST + 3% SGST)
✅ Taxes must be paid on total turnover, not just profit.

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🧾 GST Compliance Requirements for Composition Dealers
While the scheme is simpler, there are still important compliance responsibilities:
1. Quarterly Tax Payment – CMP-08
•    Form CMP-08 must be filed every quarter
•    Due date: 18th of the month following each quarter
•    Includes summary of turnover and self-assessed tax liability
2. Annual Return – GSTR-4
•    Must be filed once a year
•    Due date: 30th April of the next financial year
•    Summarizes annual turnover, tax paid, and other details
3. Invoice Format
•    No tax bifurcation (like CGST/SGST) is shown on the invoice
•    Must state: “Composition taxable person, not eligible to collect tax on supplies”
•    Maintain separate books of account
4. No Input Tax Credit
•    Composition dealers cannot claim ITC on purchases
•    Purchasers from them also cannot claim ITC on such inward supplies
5. Display Requirements
•    Must display: “Composition Taxable Person” on invoices and the place of business

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🔍 Compliance Mistakes to Avoid
Common Error    Impact
Filing CMP-08 or GSTR-4 late    Penalty of ₹50/day or ₹20/day for nil returns
Failing to pay tax on full turnover    Short payment notice, interest @ 18%
Supplying inter-state or through e-commerce    Can lead to cancellation of registration
Issuing incorrect invoices    May attract penalties under GST law
✅ Our compliance team helps avoid these pitfalls and ensures timely, accurate filings.

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💼 Why Choose Us for GST Compliance?
Managing GST can be complex, even under the Composition Scheme. That’s where we come in. Our professional GST services help you:
•    ✅ Register as a Composition Dealer (if eligible)
•    ✅ Calculate and pay quarterly taxes (CMP-08)
•    ✅ File annual GSTR-4 on time
•    ✅ Maintain correct invoice format
•    ✅ Get alerts and reminders for due dates
•    ✅ Avoid penalties or GST cancellation
📞 Need help managing GST as a small business?
Let our experts handle your filings while you focus on growing your venture.

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🏁 Final Thoughts
The GST Composition Scheme is a great way for small businesses to reduce tax stress and simplify compliance. But missing key dates, using the wrong forms, or issuing improper invoices can still land you in trouble.
✅ Stay on the safe side — file returns, pay tax, and manage compliance like a pro with our expert help.