The government authorities are in discussion to further extend the limit of composition scheme under GST as to give relief to the taxpayers. According to the reports, the government may increase the statutory threshold limit of the composition scheme in order to include the larger number of taxpayers and manufacturers. This will also help to ease the scheme and its compliance burden on the taxpaying entities.
The scheme was originally introduced to make the compliance cost of the taxpayers under budget which in turn will attract more and more business to come under the ambit of GST. A senior finance minister stated that “The government has time and again simplified the GST rules. There is a view to widening the net of the composite scheme by including businesses whose turnover does not exceed Rs 2.5 crore. The government is reviewing it.”
Recently the government authorities made an announcement in favour of lower GST rates for the composition scheme. The notification came amidst of GST overhaul being done by the government and has stated that now all the manufacturers who are under the composition scheme will only have to pay 1 percent GST instead of 2 percent being charged earlier.
The composition scheme also provides other benefits such as only one return has to be filed and the taxes have to be paid on a quarterly basis. Also, the taxpayers opted for composition scheme will now have to pay the taxes at 1 percent on the turnover of taxable supplies instead of the total turnover which was the earlier norm.
According to the statistics, there are around 81 lakh business entities which compromise under 1 crore turnover every year and the government wanted to seek all these entities into the GST ambit through the composition scheme but still there is not much interest. For the same reason, the government has pushed the deadline for registering under the composition scheme till March 2018.
