Who can Opt for the Composition Scheme?

Earlier, it was stated that any business owner who has an annual turnover of approximately 1 crore could opt for the GST Composition Scheme. However, this rule has changed now. According to the new GST Composition Scheme rules, the limit for the Composition Scheme has been raised from 1 crore to 1.5 crores. This is a major relief to innumerable businessmen across the Indian subcontinent. Moreover, the Central Government has left no stone unturned to make it as inclusive as possible. Thus, special priority has been given to North-Eastern residents. If you are a resident of the North-Eastern states and Himachal Pradesh, then the turnover limit for you is restricted to INR 75 lakhs.

What are the Requirements for the GST Composition Scheme?

• If you are opting for the Composition Scheme, then please note that you cannot claim any Input Tax Credit.
• If you are a dealer that wants to register for the Composition Scheme, then you cannot supply GST exempted goods.
• Under the rules and guidelines of the Reverse Charge Mechanism, you need to pay regular taxes.
• Please note that if you own several businesses in multiple domains such as textiles, groceries, and daily goods, then you must check the PAN that they are registered with. If you have used the same PAN, then you need to register them collectively under the Composition Scheme, or you must opt-out of it. There is no way that you can register them separately under the same PAN.
• If your business location displays any notice, then you need to pay extra attention that the words ‘Composition Taxable Person’ are printed on it. Without this, your notices and signboards will not be valid.
• According to an Amendment applicable from 1st February 2019, every dealer has the right to supply services to a limit of 10% of the total turnover, or 5 lakhs. You can choose the higher one and act accordingly.

How can you Opt for the Composition Scheme?

Now that you have complete information regarding the terms of the Composition Scheme and what it means, you must be wondering how to apply for it? It is a very simple and quick process.

The Central Government has made it possible for you to register for the Composition Scheme online via the GST portal. All that you need to do is get online and file for the CMP-01 form. Remember that you cannot do this in the middle of the fiscal year. If you feel that you qualify for the Composition Scheme with an annual turnover of around 1.5 crores, then you must apply and do the formalities at the beginning of the fiscal year.

What are the Benefits of the Composition Scheme?

Dealers Do Not Need to Indulge in Complex Procedures.

One of the biggest problems that Indian business owners faced before the implementation of the GST scheme was that they would have to indulge in a lot of paperwork for the multiple taxes that they had to pay. This was not only time-consuming but also confusing. Under the Composition Scheme, small business owners can escape heavy paperwork, insurance schemes, and maintenance of records. You can easily apply for the Composition Scheme online, and there is a complete guarantee that you will reap the benefits if you provide authentic documents and statements. Emsigner GST is the perfect way to input your digital signature and file all your GST returns online, with ease.

There is a Provision of Limited Tax liability.

Limited tax liability is perhaps the greatest benefit of the Composition Scheme. As explained earlier, there is no fixed sum of tax that you need to pay. Your turnover may vary from one year to another. Thus, you get a chance to fix a certain rate of GST that you will pay. You can enjoy a better lifestyle and engage in free business transactions when the Government supports your commercial ideas and provides you open space for deals.

You Enjoy High Liquidity of Funds due to Low Tax Rates.

The post Why was the Composition Scheme Introduced and How is it Beneficial? appeared first on Easy Info Blog.

According to a recent study done by World Band and PwC, the global average of business tax is 40.5%.  However, some countries in the world have a lower tax rate than the others. Setting up a business where the tax rate is low has its perks.

The prices generally tend to be lower than usual, which is a benefit even if you want to import goods. If, in case you want to enjoy the full benefits of running your business in a country with a low tax rate, then you should consider moving parts of your business there.

No matter the business idea you might have, entering a global stage is very necessary. After all, it makes a lot of sense to buy supplies from abroad as it helps you to cut costs and increase productivity.

Top 10 countries with the lowest or no tax for businesses

The top ten countries with the lowest or no tax for businesses are as follows:

1. Bahrain

With an amazing corporate tax of 0%, Bahrain has the fastest developing economy in the Arab world. Oil mining is the most significant industry in the nation, yet aluminum creation arrives in a nearby second.

As to, banking and money related administrations are the largest in the nation.

Respective exchange with the US is worth around $2 billion every year, with the most significant items being aluminum, apparatus, clothing, vehicles, and farming items.

2. The Bahamas

Along with their stunning location in the Caribbean, the Bahamas can also boast a business tax rate of 0%. The country’s primary source of income is tourism and financial services, and it heavily relies on the US for most of its food and manufactured goods imports.

About 6 million US citizens visit the country each year, which provides an excellent opportunity for US businesses wanting to expand overseas.

3. The United Arab Emirates

With a thriving economy and a multicultural environment, the UAE is the ultimate test ground for businesses. Under the Emirates-based tax orders, corporate taxes on all organizations (counting branches and permanent establishments [PEs]) at paces of up to 55%.

But, if you set your business in a tax-free zone in the UAE, then you get the provision of being exempted from corporate taxes. Outside the tax-free zones will do not have to pay personal income tax, but depending on the nature of your business and industry, you may be required to pay corporate tax, which you can forget if you set up your business in one of the tax-free zones.

If you are looking at setting up your business in one of the free zones, DAFZA is one of the fastest-growing free-zones located in the UAE.

4. Bermuda

Bermuda was positioned in the leading 22 nations on the planet in the last four Economist Intelligence Unit’s Digital Economy studies. Bermuda is a perfect domain for a business.

It flaunts magnificent fiber optic connections, a capable service pool, a robust IT, legal and administrative framework, and huge access to capital for speculation and development.

The Island also enjoys global branding as a secure, safe, and friendly jurisdiction for business. To add on to this, Bermuda also offers a 0% corporate tax, which makes it a haven for business owners to set up their businesses there.

5. Hungary

As of late, the Hungarian government reduced the corporate tax rate to 9% and acquainted a few measures with making the Central European EU part state increasingly alluring to remote speculators.

Hungary’s main import articles are vehicles, gadgets, nourishment, and pharmaceuticals. In case you are thinking about contributing, the travel industry, agribusiness, green ventures, and assembling are as of now on the ascent as rewarding parts.

Also, Hungary has an exceptionally talented workforce and a lower compensation level, which makes it a top redistributing area for some, US organizations.

6. Montenegro

Situated in Southeastern Europe, Montenegro has a corporate tax rate of 9%. Even though not part of the Eurozone (not, in any case, the European Union), the nation utilizes the Euro as its money.

The travel industry and administrations are Montenegro’s fundamental businesses. The country depends intensely on foreign direct investment and export and import. The administration of Montenegro is unequivocally for US speculations.

7. Paraguay

Paraguay has a corporate tax rate of 10%, which, alongside its area in South America, makes it perfect for US ventures. The mineral business gives the foundation of the nation’s economy, just as the generation of soybean, stevia, tung oil, and corn.

Paraguay has reliable business binds to the US. More than 75 US organizations are available in the South American nation, and two-sided exchange is now worth over $2.1 billion.

8. Jersey

Jersey is a great place to live and direct business, given the low corporate and individual assessments, the absence of capital additions expense and legacy charge, vicinity to the UK and Europe, and the utilization of English as an official language. Inhabitant organizations are dependent upon corporate annual assessment on their overall pay. Astoundingly, Jersey applies a corporate duty pace of 0% to organizations. Just in specific cases, companies are subject to effective corporate income tax rates. A corporate tax rate of 20% applies to (1) utility companies, (2) income and development profits from Jersey real property, and (3) profits realised on the importation and supply of hydrocarbon oil. Financial services companies such as banks are taxed at 10%.

9. Macedonia

As of late, Macedonia has effectively created as an alluring goal for foreign direct investment in the region is a substantial challenge with various nations.

As of late, Macedonia has expertly designed as an appealing goal for outside direct interest in the area. Macedonia offers a stable financial condition with one of the most reduced expansion rates in the region and steady money.

Alongside every one of these points of interest, the corporate tax rate in Macedonia comes up to just 10%, which makes it a decent arrangement for organizations to set up their recently framed business in Macedonia.

10. British territories

Several British territories employ 0% business tax. Just like how there are tax-free zones in the UAE, there are British territories that incorporate 0% tax even though in mainland UK, the tax rate will be different.

Currently, the territories with a 0% corporate tax rate are Anguilla, Bermuda, the Cayman Islands, Guernsey, the Isle of Man, and the Turks and Caicos Islands.

Conclusion

While these are the top 10 countries with the lowest or no tax for businesses, if you are an investor looking at setting up a business in the UAE, the tax-free zones are the best option for you.

Among the various tax-free zones in the UAE, DAFZA is one of the best.

Strategically located near the airport, they boast of rapid clearance and fast processing of paperwork to maximize business activity and efficiency.

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