COMPOSITION SCHEME OPTED TAXPAYER’S AGGREGATE TURNOVER LIMIT INCREASED TO Rs. 1.5 CRORES WITH EFFECT FROM 1.4.2019 IN INDIA.
The Goods
and Services Tax Act, 2017 came into force with effect from 1.7.2017 in India.
The composition
levy is an alternative method of levy of tax designed for small taxpayers whose
turnover is upto 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 traders.
Moreover, it is optional and the eligible person opting to pay tax under this
scheme can pay tax at the prescribed percentage of his turnover every quarter
instead of paying tax at normal rate.
The rate of
tax for composition levy is given below for ready reference:
COMPOSITION RATE OF TAX
Sl
No.
|
Category
of registered persons
|
Rate
of tax
|
1
|
2
|
3
|
1
|
Manufacturers, other than
manufacturers of such goods as may be notified by the Government
|
One
per cent.
|
2
|
Suppliers making supplies referred to
in clause (b) of paragraph 6 of Schedule II
|
Two
and a half per cent.
|
3.
|
Any
other supplier eligible for composition levy under Section 10 and these rules
|
Half
per cent
|
The Central
Government has now specified that an eligible registered person, whose
aggregate turnover in the preceding financial year did not exceed one crore and
fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under
sub-section (1) of section 9 of the CGST Act, an amount of tax as prescribed
under rule 7 of the Central Goods and Services Tax Rules, 2017.
The Central
Government has also prescribed the aggregate turnover in the preceding
financial year shall be seventy five lakh rupees in the case of an eligible
registered person, registered under section 25 of the said Act, in any of the following
States, namely:--
(i) Arunachal Pradesh
(ii) Manipur
(iii) Meghalaya
(iv) Mizoram
(v) Nagaland
(vi) Sikkim
(vii) Tripura
(viii) Uttarakhand
The Central
Government has also stated that the registered person shall not be eligible to
opt for composition levy under sub-section (1) of section 10 of the CGST Act if
such person is a manufacturer of the goods, the description of which is
specified in column (3) of the Table below and falling under the tariff item,
sub-heading, heading or Chapter, as the case may be, as specified in the corresponding
entry in column (2) of the said Table namely:--
TABLE
Sl. No.
|
Tariff item, sub-heading, heading
or Chapter
|
Description
|
(1)
|
(2)
|
(3)
|
1.
|
2105 00 00
|
Ice cream
and other edible ice, whether or not containing cocoa.
|
2.
|
2106 90 20
|
Pan masala.
|
3.
|
24
|
All goods,
i.e. Tobacco and manufactured tobacco substitutes
|
The above
notification comes into force with effect from 1.4.2019.
The relevant
Notification and Press Release 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)
Central
Board of Indirect Taxes
and
Customs
Notification No. 14/2019 – Central Tax
New Delhi, the 7th March, 2019
G.S.R. (E).- In exercise of the powers conferred under the proviso to
sub-section (1) of section 10 of the
Central Goods and Services Tax Act, 2017 (12 of
2017)
(hereinafter referred to as the said Act),and in supersession of the
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, except as things done or omitted to be done
before such supersession, the
Central Government, on the
recommendations
of the Council, hereby specifies that an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees, may opt to pay, in lieu of
the tax payable by
him under sub-section (1) of section 9 of the said Act, an amount of tax as prescribed
under
rule 7 of the Central Goods and Services
Tax
Rules, 2017:
Provided that the said aggregate turnover in the preceding
financial year shall be seventy-
five lakh rupees in the case of an eligible registered person, registered under section 25 of the said
Act, in any of the
following States, namely: –
(i) Arunachal Pradesh,
(ii) Manipur,
(iii) Meghalaya, (iv)
Mizoram, (v) Nagaland,
(vi) Sikkim, (vii)
Tripura,
(viii) Uttarakhand:
Provided further that the registered person shall not be eligible to opt for composition levy
under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the
goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may
be, as specified in the
corresponding
entry in column (2) of
the said Table, namely:-
TABLE
Sl.
No.
|
Tariff item,
sub-
heading,
heading
or Chapter
|
Description
|
(1)
|
(2)
|
(3)
|
1.
|
2105 00 00
|
Ice cream and other
edible ice, whether or not containing
cocoa.
|
2.
|
2106 90 20
|
Pan masala.
|
3.
|
24
|
All goods, i.e. Tobacco and manufactured
tobacco substitutes.
|
Explanation. –
(i) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively
a tariff item, sub-heading, heading and chapters as specified in the First
Schedule to the Customs Tariff Act, 1975 (51 of 1975).
(ii) The rules for the interpretation of the First Schedule to the said Customs Tariff Act,
1975 (51 of 1975), including the
Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply
to the interpretation of this
notification.
2. This notification shall come
into force on the 1st day of April,
2019.
[F.
No. 20/06/16/2018-GST
(Pt. II)]
(Dr. Sreeparvathy S.L.)
Under Secretary to the Government
of India
Press Release 7th March, 2019
Implementation of various
decisions
taken by the GST Council for the MSME
sector
The GST Council in its 32nd meeting held on 10th January, 2019, inter-alia, had taken following decisions
to be effective from 01.04.19:
· Higher exemption threshold limit for supplier of goods: There would be two threshold
limits for exemption from registration and payment of
GST for the suppliers of goods i.e. Rs
40 lakhs and Rs 20 lakhs.
States would have an option to decide about one of the limits. The threshold for registration for service providers would continue
to be Rs 20 lakhs and in case of Special category States
Rs 10 lakhs.
· Composition scheme for services and mixed suppliers: A composition scheme shall be made available
for suppliers of services (or
mixed suppliers) with a tax rate of 6% (3% CGST
+ 3% SGST) having an annual turnover in preceding financial year
upto Rs 50 lakhs.
· Increase in turnover limit for the existing composition
scheme: The limit of annual turnover in the preceding financial year for availing composition scheme for goods shall
be increased to Rs 1.5 crore. Special category
States would decide about the composition limit in
their respective States.
2. The following notifications have been
issued to
implement the above decisions:
· Notification No. 10/2019
– Central Tax, dated the 7th of March, 2019 for higher
exemption
threshold
limit
for supplier of goods;
· Notification No. 02/2019 – Central Tax (Rate), dated the 7th of March, 2019 for
Composition scheme for services and mixed suppliers, which would be optional to the
taxpayers;
· Notification No. 14/2019 – Central Tax, dated the 7th of March, 2019 for increase in
turnover limit
in case of existing composition
scheme.
3. These notifications shall
come into effect from
the
1st of April,
2019.