But under income tax the industry profit margin is required at 8% of gross turnover. So if you are making turnover of more than 50 lakhs say 1 crore, you profit will be at least 8 lakhs in a year.
A person with 8 lakhs in a year can afford a consultant to file returns etc.
Composition levy is for smaller entities who cannot afford the compliance cost.
However 8% is negligible and in reality profit margins are always at higher side and even you know how many people actually show all income under white income.
GST is perfect with exemption up to 20 lakhs and composition up to 50 lakhs.
Do not forget the advantages and disadvantages of composition scheme written by you.
The purpose of composition scheme is to provide relief to small traders from multiple monthly compliance such as return filings and monthly payments.
Even under current tax regimes such as VAT, only B2C dealers opted for composition scheme and under GST a B2B business will chose not to go under composition for obvious reasons.
chatCommentsTurnover limit is increased to 75 lakhs from 50 lakhs. - Pulkit Sharma