Group of Ministers ormed by GST Council bats for lower rates, higher threshold
By Express News Service | Published: 30th October 2017 08:00 AM |
Last Updated: 30th October 2017 08:00 AM | A+A A- |
Under the current scheme, traders, manufacturers and restaurant owners have to pay a GST rate of 1 per cent, 2 per cent and 5 per cent of their turnover, respectively.
NEW DELHI: The Group of Ministers (GoM) formed by the GST Council to review the composition scheme under the Goods and Services Act 2017, has recommended a higher eligibility cap for businesses to avail of the plan and a lower tax rate for traders, restaurants and manufacturers.
Currently, the threshold for the composition scheme, which had earlier been Rs 75 lakh, stands at Rs 1 crore. The GoM has recommended that it be raised again to Rs 1.5 crore. As per the scheme, business that have an annual turnover of below the threshold and above Rs 20 lakh are charged GST at nominal rates (1-5%).
However, the GoM, headed by Assam Finance Minister Himanta Biswa Sarma, has also recommended that rates applicable under the composition scheme be tweaked as well. Sarma told reporters that the panel has suggested that the rate for traders be reduced to 0.5 percent from one per cent and that manufacturers and small restaurant owners pay a uniform composition rate of one per cent.
Under the current scheme, traders, manufacturers and restaurant owners have to pay a GST rate of 1 per cent, 2 per cent and 5 per cent of their turnover, respectively.
“We have taken the view that composition scheme should be more flexible for restaurant owners and manufacturers,” Sarma said. Input tax credit, currently unavailable for restaurants, has also been recommended. “But, the Council should decide what should be the slab of tax, considering the revenue loss,” Sarma added. Other recommendations include allowing businesses who are engaged in inter-state sale to avail the composition scheme.
As of now, around 15 lakh businesses have opted for composition scheme. There are several advantages for businesses operating under the scheme. For instance, while a regular taxpayer has to pay taxes on a monthly basis, under the scheme it is only required to file one return and pay taxes on a quarterly basis. A composition taxpayer is also not required to keep detailed records that a normal taxpayer is supposed to maintain.The final call on these recommendations will be taken by GST Council when it meets on November 10 in Guwahati, Assam.
