The GST Regime has been continuously bringing many changes in order to ease the Taxpayer in one or the other way. And One of the Beneficial mode introduced by the Government is the Composition Scheme which is the Simple and Easy Scheme for the Taxpayers under GST. Under the Composition Scheme, Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. Also, a taxpayer opting for composition scheme has to pay tax at a nominal rate.
To bring simplicity and to reduce the compliance cost for the small taxpayers, the Government first decided to keep the Threshhold to be Rs. 75 lakhs that means the Taxpayers having the Annual Turnover below Rs. 75 lakh could opt for the Composition Scheme and could avail the benefits of Less GST Compliances. Further The Threshold was increased to Rs. 1 Crore to increase the scope of Benefit for the Taxpayers. And Gradually the Threshold Limit has increased to Rs. 1.5 Crore due to which the Businesses with Annual Turnover upto Rs. 1.5 Crore can now opt for the Compostion Scheme and avail the Benefits of Lesser GST Compliances.
And this Scheme is Applicable for the Following Taxpayers:
- Manufacturers of Goods
- Traders of Goods
- Restaurants not Serving Alchocol
However Service Providers except Restaurants are not Eligible for the Composition Scheme.
As per the Notification dated 01.01.2018, the Composition Rates have been Revised as below:
|Taxpayers Eligible for Composition Scheme||GST Rates under Composition Scheme||Revised Rates under Composition Scheme as on 01.01.2018|
Manufacturers, other than manufacturers of such goods as may be notified by the Government (Ice cream, Pan Masala, Tobbacco products etc.)
|2% (1% CGST + 1% SGST)||1% (0.5% CGST + 0.5% SGST)|
|5% (2.5% CGST + 2.5% SGST)||5% (2.5% CGST + 2.5% SGST)|
Traders or any other supplier eligible for composition levy
|1% (0.5% CGST + 0.5% SGST) of the turnover||1% (0.5% CGST + 0.5% SGST) of the turnover of Taxable supplies of goods|
In Nutshell, the Government has benefitted the Manufacturers by Reducing the GST Composition Rate from 2% to 1%. Moreover, the Goverment has clarified the Criteria to calculate the GST under Composition Scheme for the Traders so as to add the words “half per cent of the turnover of taxable supplies of goods” instead of the words “half per cent of the turnover” ie. the Turnover in case of traders has been defined as ‘ Turnover of taxable supplies of goods’.
The Said Notification dated 1st January 2018 can be downloaded from the below Link:
Notification No.01/2018 dated 01.01.2018 Click Here
To Understand it clearly, the earlier Notification which is now amended can also be downloaded with the below Link:
Notification No. 8/2017 dated 27.06.2017 Click Here
Legal Suvidha Providers can assist you in all the GST Compliances in the best manner with the Team of GST Experts. You can contact us at firstname.lastname@example.org or you can call us at 08130645164, 09599937963.