Economics · Economy
What is the primary purpose of the Composition Scheme under the Goods and Services Tax (GST) framework?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It serves as an alternative, simplified compliance mechanism enabling eligible small businesses to bypass standard complex procedures and pay a fixed percentage of their turnover as tax.✓
- 2It serves as an electronic mechanism introduced to track the movement of goods and prevent tax evasion during transportation.
- 3It serves as a mechanism allowing businesses to claim credit for taxes paid on inputs to offset their output tax liability.
- 4It serves as a specific levy overseen by the GST Council to compensate states for revenue losses during the initial years of implementation.
Correct answer
It serves as an alternative, simplified compliance mechanism enabling eligible small businesses to bypass standard complex procedures and pay a fixed percentage of their turnover as tax.
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