what is composition scheme in gst

The composition scheme in GST is a simplified and easy scheme designed for small taxpayers to reduce the burden of GST formalities and pay GST at a fixed rate based on their turnover. Taxpayers with a turnover of less than Rs. 1.5 crore (or Rs. 75 lakh in certain states) in the preceding financial year are eligible to opt for the composition scheme. This scheme allows small taxpayers to file annual returns along with quarterly payment of taxes, reducing paperwork and compliance burden. However, there are certain limitations and conditions for eligibility, and taxpayers need to be aware of the drawbacks before opting for the composition scheme. If a taxpayers turnover exceeds the specified limit, they will have to convert to the regular GST payment mechanism to comply with the GST composition scheme rules. The composition scheme is optional, and eligible taxpayers have the choice to opt for it or continue tax payments at the normal rates.