Published : 03 Jan 2018 12:04 PM
The government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it.
The finance ministry has notified the changes decided by the GST Council, chaired by Union finance minister Arun Jaitley and comprising state counterparts, in November 2017.
The notification stipulates that manufacturers who have opted for composition scheme will now have to pay 1% goods and services tax (GST) as against 2% earlier.
Besides, traders opting for composition scheme would now have to pay the tax at 1% on their turnover of taxable supplies. So far, they were paying GST on total turnover, which included turnover from exempt supplies like fruits, vegetables.
Over 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the goods and services tax (GST) which rolled out from 1 July.
There are over 90 lakh businesses registered under GST. While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis.
Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain. Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs1.5 crore.
The Council in its November meeting increased the threshold for composition scheme to Rs1.5 crore and also decided to amend the GST law to raise the statutory threshold to Rs2 crore.