Answer

1. F

   Facts

   For small businesses below ₹1.5Cr turnover, pay GST at a flat lower rate on turnover instead of the standard 18/12/5% structure. No ITC, no B2B GST invoices, simplified compliance. Two returns a year instead of 24+ monthly filings. But once you cross ₹1.5Cr or make inter-state supply, you must exit.

2. P

   Provisions and law

   • Sec 11 (old 10(1))
   • Sec 11 (old 10(2))
   • Sec 11 (old 10(5))
   • Rule 7
3. A

   Analysis

   Who benefits most from composition scheme: Small retailers, kirana shops, small restaurants, local manufacturers, where most customers are B2C (end consumers). Since composition taxpayer cannot issue tax invoices, your B2B corporate clients cannot claim ITC, so if you primarily serve corporates, composition is not ideal. Tax payment under composition: No monthly tax computation on invoice-by-invoice basis. Just pay a fixed % of quarterly turnover. Pay via CMP-08 quarterly (by 18th of month after quarter). Annual return GSTR-4 by April 30. Much simpler than monthly GSTR-1 + GSTR-3B + quarterly GSTR-9. What composition taxpayer cannot do: Cannot collect GST from customer (tax comes from your own pocket on your turnover). Cannot issue a GST tax invoice, only "bill of supply" without GST. Cannot make inter-state sales. Cannot supply exempt goods without exiting.

4. C

   Conclusion

   1. 1Check eligibility: aggregate turnover in preceding FY ≤ ₹1.5Cr (₹75L for services)
   2. 2Confirm no inter-state supplies made or planned in the FY
   3. 3Confirm not selling on Amazon/Flipkart/Meesho (e-commerce aggregator = not eligible)
   4. 4Apply for composition: GST portal → Services → Registration → Application to opt for Composition → Form CMP-02
   5. 5From effective date: issue BILL OF SUPPLY (not tax invoice), mention "Composition Taxable Person"
   6. 6Display on premises: "Composition Taxable Person, Not Eligible to Collect Tax"

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.