New Delhi: In a relief to small and medium enterprises, the GST Council today raised the turnover threshold to Rs 1 crore for businesses to avail of the composition scheme that allows them to pay 1-5 percent tax without going through tedious formalities.
With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.
The GST Council, headed by Finance Minister Arun Jaitley, at its 22nd meeting reached consensus on increasing composition threshold for SMEs, Andhra Pradesh Finance Minister Y Ramakrishnudu said.
Kerala Finance Minister Thomas Isaac said exporters will get IGST relief and e-wallet facility for six months.
The GST Council has also constituted a panel to consider rationalising GST rate for restaurants, he added.
So far over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme.
The tax rate for traders of goods in the composition scheme is 1 percent, while it is 2 percent for manufacturers and 5 percent for suppliers of food or drinks for human consumption (without alcohol).
Service providers cannot opt for the composition scheme.
The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three-stage filing process.
It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.
The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non-resident taxable person; and businesses which supply goods through an e-commerce operator.
No input tax credit can be claimed by those opting for composition scheme.
Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods.
Published Date: Oct 06, 2017 20:36 PM | Updated Date: Oct 06, 2017 20:36 PM