NEW DELHI: To make the composition scheme under the goods and services tax (GST) more attractive, the government plans to further simplify the scheme. According to sources, the government may raise the statutory threshold under the composite scheme to include more manufactures. The government had introduced the composition scheme to reduce the compliance cost for small taxpayers.
“The government has time and again simplified the GST rules. There is a view to widen the net of composite scheme by including businesses whose turnover does not exceed Rs 2.5 crore. The government is reviewing it,” said a senior finance minister official.
On Tuesday evening, the government had notified lower GST rates for composition scheme. The notification stipulated that manufacturers who have opted for composition scheme would now have to pay 1 per cent GST against 2 per cent earlier. Apart from lower tax rates, there are easier norms for traders opting for the composite scheme. For instance, 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.
Besides, traders opting for composition scheme would now have to pay tax at 1 per cent on their turnover of taxable supplies. So far, they were paying GST on total turnover.
According to a government report, there are more than 81 lakh enterprises that have a turnover of less than Rs 1 crore every year. The government wanted to attract this segment under the composition scheme but there were not many takers. That was the reason the government pushed the deadline for registering for the composition scheme till March 2018.
To make the composition scheme under the goods and services tax (GST) more attractive, the government plans to further simplify the scheme.