Recently in a internal research done by the finance ministry, it was unearthed that around 5 lakh companies were those who had only 5 lakh or less turnover for a year, which clearly shows that they opted composition scheme without any strong need to do so. In the GST provisions, it is stated that the business units which are under the threshold limit of 20 lakhs per annum turnover do not need to get registered under the GST.
Just for the knowledge, around 7 lakh business units filed GST returns for the July – September quarter out of total 10 lakh composition scheme registered taxpayers. Finance Secretary Hasmukh Adhia said in an industrial meeting, “To our surprise, out of 7 lakh, 5 lakh people had filed such return for the quarter which results into annual turnover of less than Rs 5 lakh. Now we are wondering why did they register then? Up to Rs 20 lakh (annual turnover) there is no need to register in GST.”
It is unknown why those business units with lesser turnover needed to register under GST composition scheme. Adhia added that “We didn’t know these statistics when we increased the limit for availing composition scheme to Rs 1.5 crore. There is no need to do that.”
In a late November GST council meeting 2017, the council approved an increase in threshold limit for composition scheme up to 1.5 crores and decided for amendments in the law regarding the raising statutory threshold to Rs 2 crore.
