WHAT IS COMPOSITION
SCHEME IN VAT ?
Hello, friend no
need to be panic ,composition is simple term which is used in VAT as every
buddy well aware of what is VAT (if not go here VAT) if you are then every one
also heard about the composition scheme , what is composition scheme ,what is
its important/benefits and how one can
registered him under this scheme ? So lets see ..
.jpg)
Composition scheme
is nothing but a mix scheme of VAT in which government give some relief related
to documentation for businesses in
which no need to keep detail record,
because of this its accounting and calculations become easy for businesses . All
less stress to keeping records unto date. This method also provide better way
to calculate VAT in easy way because your given with a specified interest rate
on your business ,this is it what composition is all about.
WHO CAN OPT FOR
COMPOSITION SCHEME OF VAT
There are different
kind of business which can join the composition scheme if they want to join
that there is no restriction on any one to join this scheme.
There are parties
who can join this scheme
Like if you have
restaurant , any hotel , running any club, have your catering and food serving
business (but it should not be contain any alcoholic drinks),retail business
,bakery ,person who are dealing in second hand motor vehicles and engaged in
works contract business etc is list.(people who involve in work contract can
get more info on MAHAVAT site)
PEOPLE WHO CAN NOT
OPT FOR COMPOSITION SCHEME .
Composition scheme
is not available for people who doing manufacture business ,for people engage in import
business, for dealer who purchase goods from registered dealers related to high
seas, retail business who sell foreign liquors and domestic liquor, retail dealing in drugs which covered in entry
c-29 etc..
ADVANTAGES OF
COMPOSITION SCHEME
As above said its on
you that what kind of record keeping system you want and what type of your
business is .its main benefit is only this that u have a fixed interest rate
and just you have to impose that rate also there is less burden to maintain
record serial wise . So its save your time, your money.
DISADVANTAGE OF
JOINING COMPOSITION SCHEME?
- Main disadvantage of joining composition scheme is that you cannot claim set-off of your purchase
- Second main disadvantage is you are not able to issue tax invoice to your customers
- People who engage in work contracts and 2nd hand motors vehicles dealing can issue tax invoice also for them there are special provisions for claiming set-off (you can get more information about it on our next article
HOW TO JOIN
COMPOSITION SCHEME ?
If you are already have VAT registration then
you can go for form no 107 which you can get from sale tax department. If your
are applying for VAT registration and want to join composition scheme then go
for form no 101 that all.
Know about due dates related to VAT
0 comments:
Post a Comment