Composition scheme for small taxpayers extended to Rs. 1.5 crore
The GST Council in its 23rd meeting in Guwahati has decided to increase the threshold for composition scheme once again to Rs 1.5 crore and also decided to amend the law to increase the statutory threshold to Rs.2 crore. Amendment will be made in the law accordingly.
“There has been an increase in the threshold to Rs 1.5 Crores from the 1 Crore limit. The increase in threshold seems to align itself with the exemption which was applicable under the central excise regime. The increase in the threshold to Rs 1.5 crore is a welcome relief for small traders/ manufacturers who would now have a simple compliance – this move should not result in in significant revenue loss to the Government, as the dealers opting for the composition scheme would have to forgo the in ..
A large chunk of taxpayers in the Nil category have opted for GST registration. This is big taxpayer base, of which about 15.5 lakh are the ones who have opted for the composition scheme and the increase in threshold is expected to lead to an increase in that number. Under composition scheme you need to file quarterly returns.
There will be a uniform rate of 1% ( 0.5% Central tax plus 0.5% State tax) on composition scheme for dealers and manufacturers. Manufacturers under this scheme earlier pay 2% ( 1% Central tax plus 1% State tax) of the turnover. Restaurant Services pay 5% (2.5% Central tax plus 2.5% SGST) of the turnover and this remains unchanged,
The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 1.5 crore and pays a flat rate of tax regardless of what they manufacture, provide as a service or trade they carry on. Moreover, it is optional and the eligible .