Subdued demand may force relook at GST composition scheme
With just about one lakh of 70 lakh businesses opting for GST Composition Scheme, tax authorities are reviewing why the scheme that allowed such entities to pay a fixed 1-5 per cent tax, has not clicked.
A senior government official said the Central Board of Excise and Customs (CBEC) is trying to ascertain the reasons for businesses not opting for the Composition Scheme that was especially designed to ease compliance burden of small traders.
It plans to step up media outreach programme to popularise the scheme.
The composition scheme is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh (Rs 50 lakh in case of eight north-eastern states and the hilly state of Himachal Pradesh). The objective behind it is to bring simplicity and reduce the compliance cost for small taxpayers.
The scheme is optional wherein manufacturers, other than those of ice cream, pan masala and tobacco products, have to pay a 2 per cent tax on their annual turnover. The tax rate is 5 per cent for restaurant services and one per cent for traders.
"Out of the assessee base of 70 lakh, one lakh is very small number. One reason could be that the composition scheme cannot be availed by businesses engaged in inter-state trade.
We are looking at it," the official said.
GST Network - the IT backbone of the Goods and Services Tax (GST) regime, had in first week of July asked over 70 lakh excise, service tax and VAT assessees who have migrated to the new indirect tax regime to log in to their account and opt for composition scheme latest by July 21.
- 22 Aug 2019 6:17 PM GMT
- 1 May 2017 6:52 PM GMT
- 8 Oct 2019 4:43 PM GMT
- 31 Aug 2019 1:38 PM GMT
- 25 Oct 2017 3:32 PM GMT