The Composition Scheme is available to manufacturers, traders, and restaurant services with annual turnover up to INR 1.5 crores (INR 75 lakhs for special category states). Service providers other than restaurants can avail a similar scheme up to INR 50 lakhs under the CGST Act amendment. Key restrictions: composition dealers cannot issue tax invoices, cannot charge GST from customers, cannot claim input tax credit, and cannot make inter-state supplies.
If your organisation is a composition dealer, configure your GST settings in Zoho Books to enable the composition scheme. This prevents GST from being calculated on your outgoing invoices and generates a “Bill of Supply” instead of a tax invoice. Your flat-rate GST payment is recorded as a periodic expense or a journal entry, not as output tax on individual invoices.
If a vendor is a composition dealer, set their GST treatment to “Registered Composition” in their Zoho Books contact record. Zoho Books will then exclude any ITC from their bills (since composition dealers cannot issue tax invoices with GST), preventing you from incorrectly claiming ITC that is not available.
Composition dealers file GSTR-4 annually (with CMP-08 quarterly for tax payment). Zoho Books does not specifically generate GSTR-4 for composition dealers, but the sales and purchase data recorded in Zoho Books can be used to prepare GSTR-4 manually or with the help of your CA. The simplicity of the scheme means fewer GST reports are required.
The GST Composite Scheme in Zoho Books is the simplified tax regime for small businesses paying a flat-rate GST. Composition dealers are set up with Registered Composition GST treatment, preventing ITC claims on their bills.
Yes. A composition dealer raises Bills of Supply (not tax invoices) in Zoho Books without charging GST to customers. If a vendor is a composition dealer, set their GST treatment to Registered Composition and do not claim ITC on their bills.
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