There are around 90 lakh businesses registered under GST. Out of these, almost 15 lakh businesses have opted for the composition scheme, which permits them to pay taxes at a concessional rate & makes compliance easier under GST. Now the Government Notifies 1% GST for Manufacturers under Composition Scheme.
The GST Council in November 2017, increased the threshold limit under composition scheme to Rs. 1.5 crore & also decided to amend the GST law to increase the statutory threshold to Rs. 2 crores. Manufacturers, restaurants, & traders whose turnover does not exceed Rs 1.5 crore, can opt for composition scheme. Under this scheme, they need to file only one return & pay taxes on a quarterly basis. They even don’t have to keep detailed records that a regular taxpayer has to maintain.
Government Notifies 1% GST for Manufacturers under Composition Scheme
The finance ministry has issued Notification No. 1/2018, which specifies the changes decided by the GST Council, chaired by the Finance Minister Arun Jaitley and comprising state counterparts. The Government has lowered 1% GST rate & made norms easier for manufacturers & traders respectively, opting for composition scheme.
As the notification specifies, manufacturers who have opted for the composition scheme would now have to pay 1% GST as against 2% earlier. Moreover, traders who have opted for composition scheme shall now pay tax at 1% on their turnover of taxable supplies. As of earlier, they were paying GST on total turnover, which included turnover from exempt supplies like fruits, vegetables.
EY India Tax Partner Abhishek Jain said that this would make the composition scheme under GST more attractive.
Download Notification No. 1/2018- Central Tax here.