Understanding GST Filing for Interior Services: Composition Scheme and Quarterly Returns

Introduction to the Issue and the Composition Scheme

Our firm operates in the interiors sector, and our annual turnover is less than 1.5 crore. Given the eligibility criteria for the Composition Scheme, we must clarify whether our business is eligible for this scheme or if we are required to operate under the regular scheme.

The Composition Scheme, as per the provisions of the Goods and Services Tax (GST) Act, is primarily available to service providers, with the exception of restaurants. Since providing interior services falls under the service sector, the Composition Scheme is not applicable for our business. Therefore, we must operate under the regular scheme.

The Composition Scheme and Filing GST Returns Quarterly

Filing of GST returns on a quarterly basis and eligibility for the Composition Scheme are two distinct concepts. A business is eligible for the Composition Scheme if it meets specific conditions outlined in the Act and the rules under it. Some of these conditions include:

The business is not a service provider, except in the context of a restaurant. The annual turnover of the business does not exceed 1 crore rupees.

Based on the provided information, if your firm's turnover is less than 1.5 crore, and assuming it is more than 1 crore, you are not eligible for the Composition Scheme. However, you can still file quarterly returns under the regular scheme as per existing provisions.

Benefits and Necessity of Quarterly Returns

While the Composition Scheme offers several benefits, such as simplified record-keeping and eliminating the need for Input Tax Credit (ITC) calculations, it may not be the best fit for businesses with a higher turnover. Even if you are not eligible for the Composition Scheme, you can still benefit from filing quarterly returns under the regular scheme, as long as your business turnover is within the prescribed limit.

Filing quarterly returns means you will need to submit GST returns every three months, even if you are not eligible for the Composition Scheme. This ensures compliance with the GST regime and helps maintain a clear record of your business transactions.

Conclusion and Further Considerations

For businesses in the interiors sector with an annual turnover of less than 1.5 crore, eligibility for the Composition Scheme is contingent on meeting specific conditions, with a turnover not exceeding 1 crore. While the Composition Scheme simplifies record-keeping and eliminates ITC calculations, it is not the only option available.

Even if you are not eligible for the Composition Scheme, you can still opt for quarterly filing under the regular scheme, ensuring that your business complies with GST regulations and maintains accurate records.