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GST Composition Scheme and its amendments



Author: Yatin Jain
Published On:January 04,2018

GST Composition Scheme and its amendments

GST in its way as adopted by Indian Government and public of India from July 01 2017 has been pass through various changes and amendments through various council meetings.

23rd Council Meeting of GST held on 10th November 2017 headed by Finance Secretary, Mr. Hasmukh Adhia , has proposed several changes in the Composition scheme of the GST.

Composition scheme is easy and simple scheme for small GST Tax payers, with lesser compliances for ease of doing business in easy manner.

Eligible Persons:

·         Annual Turnover* less than 1.5 Crores earlier it was 1 crore (North East and Himachal Pardesh turnover is less than 75 Lakhs)

 *Turnover is considered with same PAN

Ineligible Person:

·         Exempt supplies business

·         Service provider other than Restaurant Services

·         Manufacturer of Ice cream, Pan Masala and Tobacco

·         Casual and NRI Taxable person

·         Business suppliers through E commerce portal

Key Points of the Scheme  

·         Input Tax credit cannot be availed

·         Interstate supplies are not allowed

·         No Exempted goods supplies

·         Normal Rates of taxes on RCM transactions

·         Has to mention “Composition Taxable Person” on every notice or signboard or Bill of supply

·         Assesee who is opting the composition scheme can provides a services upto INR 5 lakhs exempt from taxes

Advantages V/s Disadvantages of Scheme 

Advantages

Disadvantages

Lesser compliances

Limited territory of Business

Limited Tax Liability

No ITC available

More liquidity due to lesser rates

No exempted goods supply or supply through e-commerce portal

 Changes summarised in Composition Scheme

S.no

Basis

Earlier

After 23rd Council Meeting

1

Threshold

1 Crore Annual Turnover

1.5 Crore Annual Turnover

2

Tax Rates of Manufacturer

2% (1% under both CGST and SGST)

1% (0.5% under both CGST and SGST)

3

Tax Rates of Trader

1% (0.5% under both CGST and SGST)

Same

4

Tax Rates of Restaurant Services

5% (2.5% under both CGST and SGST)

Same

5

Service Provider

Nil Services

Up to INR 5 Lakh per annum