As per the sources, the service providers with an annual turnover of up to INR 50 lakh has been given the time till April 30 to opt for the composition scheme and pay 6 per cent GST by the tax department.
For the taxpayers, the option to pay GST at a reduced rate of 6 per cent for composition scheme will be available from the beginning of the 2019 fiscal year or from the date of obtaining new registration during this fiscal year.
Unlike the higher GST rates of 12 and 18 per cent against most services under GST, the service providers opting for a composition scheme can charge a lower tax rate of 6 per cent from customers. In a notice, the Central Board of Indirect Taxes and Customs (CBIC) pinned that suppliers who have registered under the composition scheme must file Form GST CMP-02 by selecting the option ‘Any other supplier eligible for composition levy’ latest by April 30, 2019.
During the time of filing the registration application, the business can avail the said benefit in Form GST REG-01. Rajat Mohan, a partner at AMRG & Associates, said “numerous service providers tried to file this intimation opting composition scheme recently but were denied due to a legal embargo. Now with this clarification, GSTN would start accepting the intimations soon”.
The GST Council, led by Finance Minister, Arun Jaitley and varied state ministers, have allowed a total of 10 service providers and the ones who are dealing in both goods and services with an annual income of up to INR 50 lakh to opt for the composition scheme w.e.f April 1, 2019. Till now, the composition scheme was only made available to those traders and manufacturers, who are having an annual income of up to INR 1 crore. This threshold limit is also ready to be hiked to INR 1.5 crore from April 1, 2019.
Read Also: GST Composition Scheme: Key Features, Eligibility and Registration Process
Talking more about this scheme, the traders and manufacturers will be required to pay only 1 per cent GST on good and services, which otherwise are imposed with a higher tax of 5, 12 or 18 per cent. Such dealers are not also restricted to charge additional GST from the purchaser. However, the knowledge related to GST composition scheme looks bleak among businesses as only 20 lakh so far has opted for the composition scheme among the 1.20 crore registered traders and manufacturers.
