GST Composition Scheme: Eligibility, Benefits and Billing
Last updated on: August 4, 2025 at 12:32 PM
The Goods and Services Tax (GST) Composition Scheme is a simplified tax compliance system for small businesses and startups in India. Under this scheme, eligible businesses can pay a flat GST rate and file returns quarterly, reducing compliance burden. However, understanding the GST Composition Scheme bill format is crucial for accurate invoicing and compliance. In this article, we’ll break down the key components of the GST Composition Scheme bill format.
What is the GST Composition Scheme?
The GST Composition Scheme is designed for:
- Small businesses with annual turnover up to ₹1.5 crore (₹75 lakh for special category states)
- Startups and new businesses
- Businesses with limited financial resources
Benefits of GST Composition Scheme
- Simplified tax compliance
- Reduced tax liability
- Quarterly return filing
- Lower tax rates (0.5% to 1% of turnover)
GST Composition Scheme Bill Format
A GST Composition Scheme bill must include:
- GSTIN (Goods and Services Tax Identification Number): 15-digit unique identifier 2. Composition Taxpayer: Mention “Composition Taxpayer” clearly
- Bill Number: Unique bill number for each invoice
- Date: Date of invoice
- Customer Details: Name, address, and GSTIN (if registered)
- Supply Details: Description, quantity, and value of goods/services
- Tax Amount: Composition tax amount (0.5% to 1% of turnover)
- Signature: Authorized signatory’s signature
Key Considerations
. Ensure accurate GSTIN and customer details
- Mention “Composition Taxpayer” clearly
- Maintain separate records for taxable and exempt supplies
- File quarterly returns (GSTR-4)
- Pay composition tax on time
Penalties and Consequences
Failure to comply with GST Composition Scheme requirements may result in:
- Penalty of ₹25,000
- Cancellation of GST registration
- Interest on outstanding tax liabilities
Conclusion
The GST Composition Scheme bill format is designed to simplify tax compliance for small businesses. By understanding the key components and benefits of this scheme, businesses can ensure accurate invoicing and compliance. If you’re eligible for the GST Composition Scheme, consult with a tax professional to ensure seamless transition.
FAQs
Q: Who is eligible for the GST Composition Scheme?
A: Businesses with annual turnover up to ₹1.5 crore (₹75 lakh for special category states).
Q: What is the tax rate under the GST Composition Scheme?
A: 0.5% to 1% of turnover.
Q: How often do I need to file returns under the GST Composition Scheme? A: Quarterly.