New Delhi: The tax department has given service providers with turnover of up to Rs 50 lakh time till April 30 to opt for the composition scheme and pay 6 per cent GST. The option to pay Goods and Services Tax (GST) at reduced rate of 6 pc would be effective from the beginning of the current FY or from the date of obtaining new registration during the year.
Service providers opting for the composition scheme can charge a lower tax rate of 6 per cent from customers, as against the higher rates of 12 and 18 pc for most services under GST. In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said suppliers who want to opt for composition scheme would have to file Form GST CMP-02 by selecting ‘Any other supplier eligible for composition levy’ latest by April 30, 2019.
Businesses which apply for new registration may avail the said benefit in Form GST REG-01 at the time of filing application for registration. AMRG & Associates Partner Rajat Mohan said “numerous service providers tried to file this intimation opting composition scheme recently but were denied due to a legal embargo. Now with this clarification, GSTN would start accepting the intimations soon”.
The GST Council, headed by Finance Minister Arun Jaitley and comprising state ministers, in its meeting on January 10 had permitted service providers and those dealing in both goods and services with a turnover of up to Rs 50 lakh to opt for composition scheme with effect from April 1.
The GST composition scheme was so far available to traders and manufacturers of goods with an annual turnover of up to Rs 1 crore. This threshold too has increased to Rs 1.5 crore from April 1. Under the scheme, traders and manufacturers are required to pay only 1 per cent GST on goods which otherwise attract a higher levy of either 5, 12 or 18 per cent. Such dealers are also not permitted to charge GST from the purchaser.
Clarify mismatch in sales returns, e-way bill data
GST officers have started seeking clarification from companies whose tax payments did not match with the e-way bills generated, as revenue authorities start matching supplies data to check tax evasion, sources said. Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000.
The same for intra state was rolled out from April 15, 2018. Following this, it has come to the notice of tax officers that some transporters are doing multiple trips by generating only a single e-way bill or not reflecting e-way bill invoices while filing sales return. It has also come to the notice that certain businesses are not generating e-way bills even as supplies are being made.