Group of ministers on GST composition scheme holds first meeting
By PTI | Published: 15th October 2017 04:50 PM |
Last Updated: 15th October 2017 05:04 PM | A+A A- |
An illuminated Parliament at midnight launch of 'Goods and Services Tax GST ' in New Delhi. (Photo | PTI)
NEW DELHI: Within a week of being set up, the group of ministers (GoM) on making the GST composition scheme more attractive held its first meeting today.
The 5-member GoM, under Assam Finance Minister Himanta Biswa Sarma, has also been tasked to revisit Goods and Services Tax (GST) rates for restaurants.
With only over 15.50 lakh businesses out of 98 lakh registered under the GST regime opting for the composition scheme, the GST Council decided to set up the GoM to examine ways of making it more attractive.
Businesses with a turnover of up to Rs 1 crore can opt for the composition scheme and they can pay taxes in the range of 1-5 per cent and file returns quarterly.
The GST Council, chaired by Finance Minister Arun Jaitley and consisting of his state counterparts, had on October 7 constituted the GoM, which will submit its report by the end of November.
The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal.
The GoM has also been tasked with revisiting the tax structure of different categories of restaurants with a view to rationalising or reducing the rates.
Currently, GST is levied at 12 per cent on non-AC restaurants while it is 18 per cent for air-conditioned ones.
The GoM will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they are not, whether they should be disallowed input tax credit claims.
To make the composition scheme more attractive, the GoM would look into whether turnover of exempted goods can be excluded from the total turnover threshold for levying the tax under the composition scheme.
It will also consider whether the scheme can be extended to taxpayers dealing in inter-state supplies of goods.
Besides, the panel will look at whether the manufacturers opting for the scheme can be given the benefit of input tax credit.
The GST Council, in its last meeting, hiked the threshold for availing of the composition scheme to Rs 1 crore, from the Rs 75 lakh set earlier.
The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for restaurants.
