The composition scheme meant to make the GST compliance easier but the government suspects that this scheme has been misused by the small business enterprises (SMEs) by an average quarterly turnover approximately Rs 2 lakh. Composition scheme had been adopted by 10 lakh business entities in July-September quarter- under which they have to show the details of turnover and tax is being paid at the normal rate. Out of them, about 6 lakh taxpayers had filed returns under GST till 25th December 2017. However, the total amount obtained from SMEs in a quarter reached to Rs 251 crores, translating into an annual turnover of Rs 8 lakh.
These figures surprised the government as minimum annual turnover limit require to register under GST is Rs 20 lakh. Composition scheme registration increasing day- by- day, so far nearly 15 lakh entities registered under this. Tax officials are fearing that due to the multiple relaxations, might be there is a chance of leakage of tax revenue from the GST system.
According to the tax official, “We were planning to increase the ceiling above the currently prescribed Rs 1 crore. Now we are wondering if there is a need to do so if the average declaration shows turnover of Rs 8 lakh per year.” The cap of composition scheme had been raised by the GST Council to Rs 1.5 crores.
These shocking figures have encouraged the Finance Minister officials to go through once with the scheme for payment of presumptive tax under the income tax. In fact, the annual turnover threshold limit has been enhanced to Rs 2 crores under the scheme. As per the statistics, the average annual income is Rs 18 lakh, and according to the officials, this income is less than real income.
Hon’ble Minister Shri Arun Jaitley & Hasmukh Aadhia Ji.
We were registered under Vat & CST since 2014 and had an annual turnover of Just around 20 lakhs and we had hoped with our regular built up clientele we could improve much and registered under GST.
However, to our own shock and dismay, we are about to close down. To tell you the fact we have not had total turnover post-GST from July to December what we had in the one-month pre-GST in June! That is the fact on the ground. We sell semi-precious stones in an upmarket store in Chennai. OUR LOSSES ON ACCOUNT OF GST is several lakhs! So your findings may be correct. TRADERS AND CUSTOMERS ARE BOTH HURT! FASHION GEMS CHENNAI. ( We had problems filing GSTR 3 B too )