COMPOSITION SCHEME TAX RATE TO MANUFACTURERS REDUCED FROM 2% TO 1% WITH EFFECT FROM 1.1.2018
The Goods and Services Tax Act,
2017 came into force with effect from 1.7.2018 in India.
The composition levy is an
alternative method of levy of tax designed for small taxpayers whose turnover
is up to Rs. 75 lakhs ( Rs. 50 lakhs in case of few States). The objective of
composition scheme is to bring simplicity and to reduce the compliance cost for
the small taxpayers. Moreover, it is optional and the eligible person opting to
pay tax under this scheme can pay tax at a prescribed percentage of his
turnover every quarter, instead of paying tax at normal rate.
The composition levy turnover
Rs.75 Lakhs (Rs.50 Lakhs in case of few States) has been raised to 1 Crore
(Rs.75 Lakhs in case of few States) with effect from 13.10.2017 vide
Notification No.46/2017 (Central Tax) dated 13th October 2017.
Now the Central Government has
reduced tax rates for manufacturers from 2% to 1% as shown below:
Sl.
No.
|
Category of Registered Person
|
Rate of Tax from 1.7.2017 to 31.12.2017
|
Rate of Tax from 1.1.2018
|
1.
|
Manufacturers, other than manufacturers of such goods as may be
notified by the Government (Ice cream, Pan Masala, Tobbacco prodcuts etc.)
|
2% (1% Central tax plus 1% State tax) of the turnover
|
1% ( 0.5% Central tax plus 0.5% State tax) of the turnover
(Reduced from 2% to 1%)
|
2.
|
Restaurant Services
|
Services 5%
(2.5% Central tax plus 2.5% SGST) of the turnover
|
Services 5%
(2.5% Central tax plus 2.5%
SGST) of the turnover
(No Change)
|
3.
|
Traders or any other supplier eligible for composition levy
|
1% ( 0.5% Central tax plus 0.5% State tax) of the turnover
(No Change)
|
1% ( 0.5% Central tax plus 0.5% State tax) of the turnover
(No Change)
|
The Central Government’s Turnover
increase Notification and Tax rate reduction Notifications are given below for
ready reference:
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II,
SECTION 3,
SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF
FINANCE
(Department of Revenue)
Notification No. 1/2018- Central Tax
New Delhi,
the 1st January, 2018
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12
of 2017) the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the
notification of the Government of India in the Ministry
of Finance (Department of Revenue),
No.8/2017- Central Tax, dated the 27th June, 2017,
published in
the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 647 (E), dated the 27th June, 2017, namely:-
In the said notification,
in the opening paragraph, -
(a) in clause (i),
for the words
“one per cent.”,
the words “half
per cent.” shall be
substituted;
(b)
in clause (iii), for the words “half per cent. of the turnover”, the words
“half per cent. of
the turnover of
taxable supplies of goods” shall be substituted.
[F.
No. 354/320/2017- TRU]
(Ruchi Bisht) Under
Secretary to Government of India
Note: - The principal notification
No.8/2017-Central Tax, dated
the
27th June, 2017, published
in the Gazette
of India,
Extraordinary, Part II, Section 3, Sub-section (i), vide
number G.S.R. 647(E), dated the 27th June, 2017 and last amended by Notification No.
46/2017-Central Tax, dated 13th October, 2017 published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide number GSR 1287 (E), dated the 13th
October, 2017.
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II,
SECTION 3,
SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF
FINANCE
(Department of Revenue)
Notification No. 46/2017- Central Tax
New Delhi,
the 13th October, 2017
G.S.R. (E).- In exercise
of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12
of 2017) the Central Government, on the recommendations of the Council, hereby makes the following
amendments in the notification
of the Government of India in the Ministry
of Finance (Department of Revenue), No.8/2017-
Central Tax, dated the 27th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section
3, Sub-section (i),
vide number G.S.R. 647 (E), dated
the 27th
June, 2017, namely:-
In the said notification,-
(i) for the words “seventy-five lakh rupees”, the words, “one crore
rupees” shall be
substituted;
(ii) for the words “fifty lakh rupees”, the words, “seventy-five lakh rupees” shall be
substituted;
[F.
No. 354/117/2017- TRU (Pt. III)] (Ruchi Bisht)
Under Secretary to Government
of India