The government has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017, of lower 1 percent Goods and Services Tax (GST) rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it.
The notification stipulates that manufacturers who have opted for composition scheme will now have to pay 1 percent GST as against 2 percent earlier. Besides, traders opting for composition scheme would now have to pay the tax at 1 percent on their turnover of taxable supplies. While, a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1.5 crore.
Over 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the goods and services tax (GST) which rolled out from 1 July. The GST Council in its November meeting increased the threshold for composition scheme to Rs 1.5 crore and also decided to amend the GST law to raise the statutory threshold to Rs 2 crore.