In this article, we’re going to take a closer look at the SWOT analysis of the composition scheme.
SWOT analysis of the composition scheme
| STRENGTH | WEAKNESS |
|---|---|
| Pay GST at composite rate | No input tax credit on the purchases |
| Simplified compliances | No interstate supply (i.e. between states) |
| Minimal GST records | Cannot supply through e-commerce (except own website) |
| Quarterly payment of GST, ensures high liquidity | Restriction on Manufacturing of notified goods |
| Limited book keeping | Limited territorial scope |
| Reduced compliance cost | Restricted supply of service |
| No need of classification of GST rates | |
| OPPORTUNITIES | THREATS |
| More B2C sale (i.e. end consumer or unregistered dealer) | Loss of business opportunities due to numerous restrictions |
| Competitive advantage as no tax is charged | |
| No burden on GST taxpayer | |
| More time for business operations |
About The Author: CA Siddhi Shah
I am Chartered Accountant practicing in GST Law, Corporate Law and Income Tax Law.
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