Group of Ministers set up to make GST composition scheme more attractive
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The GST Council, chaired by finance minister Arun Jaitley and consisting of his state counterparts, had on Friday constituted the GoM, which will submit its report within two weeks. The other members are Bihar deputy chief minister Sushil Modi, Jammu and Kashmir finance minister Haseeb Drabu, Punjab finance minister Manpreet Singh Badal and Chhattisgarh minister of commercial taxes Amar Agrawal, according to an office memorandum.
With only 15.5 lakh of the total 98 lakh businesses registered under the GST regime opting for the composition scheme, the GST Council decided to set up the GoM to examine measures to make it more attractive.
Businesses with turnover of up to Rs 1 crore can opt for the composition scheme and they can pay taxes in the range of 1-5% and file returns quarterly.
The GoM has also been tasked with revisiting tax structure of different categories of restaurants with a view to rationalising or reducing the rates. Currently, GST is levied at 12% on non-AC restaurants while it is 18% in case of airconditioned ones.
The GoM will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they don’t, whether they should be disallowed input tax credit claims.
To make the composition scheme more attractive, the GoM will look into whether turnover of exempted goods can be excluded from the total turnover threshold for levying tax under the composition scheme. It will examine whether the scheme can be extended to taxpayers dealing in inter-state supplies of goods and whether the manufacturers opting for it can be given the benefit of input tax credit.
The GST Council, in its last meeting, hiked the threshold for benefits under the composition scheme to Rs 1 crore, from Rs 75 lakh set earlier. #casansaar (Source - Economic Times)
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