As per the GST Law, a registered person is liable for ITC on the purchase of goods and services.Any money spent on capital goods in the form of GST, you will get back in the form of ITC.When you make sales, you will collect the GST on the good or services. For the purchase of raw material and other purchases, you have paid an amount of GST.At the end of the month, you will have to just pay the difference between GST paid and GST collected.
Like every tax reform, India's Goods and Services Tax (GST) will face various hurdles and difficulties during its implementation. Small taxpayers will be particularly affected. To help ease the implementation and tax compliance process for them, the government has introduced a composition scheme. This already exists under many state VAT laws. However, it is absent in the central laws of service tax and excise.The composition scheme allows qualifying taxpayers - those whose turnover in the preceding financial year was less than 50 lakhs - to pay a percentage of their yearly turnover in a state as tax. This relieves the taxpayers from collecting tax from their customers directly and provides other benefits as well.