Mentioned below are some frequently answered questions regarding GST, released by the Government, on issues, hovering over MSMEs –
Q1: Whether a registered person under the composition scheme needs to learn HSN code of any input purchases and output supplies?
A1: No, a registered person under the composition scheme would not need to specify HSN code of their products in bill of supply or return.
Q2: What return a registered person under the composition scheme needs to file and at what frequency?
A2: A registered person under the composition scheme of GST is required to furnish quarterly return called GSTR-4 between the 11th day and 18th day of the month succeeding the quarter.
Q3: What details are required to be furnished in the return to be filed by the registered person under the composition scheme?
A3: GSTR-4 may be referred for details required to be filled in the return. It is a very simple return containing consolidated details of outward supplies, details of import of services or other supplies attracting reverse charge and inward supplies which shall be auto-populated.
Q4: What are the accounts a manufacturer under the composition scheme needs to maintain?
A4: Rules on Accounts and Records provide details of the accounts to be maintained. They are maintained under normal course of business by any small manufacturer. The details to be maintained in accounts inter-alia consists of goods supplied, inward supplies attracting reverse charge, invoices, bills of supply, delivery challans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers etc.
Q5: Does a manufacturer under the composition scheme need to maintain details of accounts of every supply received and made?
A5: No, the requirement to maintain detailed accounts of stocks in respect of goods received and supplied, work in progress, lost; destroyed etc. does not apply to a manufacturer under the composition scheme. Such a person shall maintain a true and correct account of production or manufacture of goods, inward and outward supply of goods, stock of goods, tax payable and paid.
Q6: Does a manufacturer under the composition scheme needs to maintain account of inputs tax credit?
A6: A manufacturer under the composition scheme need not maintain account of input tax, input tax credit claimed etc. as he is neither allowed to avail of input tax credit nor can he issue an invoice showing tax using which buyer can avail input tax credit.
Q7: Can a manufacturer under the composition scheme maintain his accounts manually? And can he issue his bill of supply manually?
A7: Yes, a manufacturer under the composition scheme can maintain his accounts in registers serially numbered and also issue bill of supply manually following the conditions specified in rules in this regard.
Q8: For the purpose of availing composition how will aggregate turnover be computed for the purpose of composition?
A8: Aggregate turnover shall be computed on the basis of turnover on all India basis. It includes aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number but excludes GST and cess.
Q9: Can a person who has opted to pay tax under the composition scheme avail Input Tax Credit on his inward supplies?
A9: No, a taxable person opting to pay tax under the composition scheme is out of the credit chain. He cannot take input tax credit on the supplies received.
Q10: Is it necessary to issue invoices even if the value of transaction is very low?
A10: A registered person may not issue a tax invoice if the value of the goods/services supplied is less than Rs.200/-, subject to the condition that the recipient is not a registered person and the recipient does not ask for such invoice (if the recipient asks for the invoice then the same must be issued, irrespective of the value).
In such cases, the registered person shall issue a consolidated invoice at the end of the day in respect of all such supplies.
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