Composition Scheme Threshold Limit Increased to Rs. 1 Crore under GST, notified by CBEC

CBEC Notifies Increased Threshold Limit for Composition Scheme (from Rs. 75 Lac to Rs. 1 Crore)

GST Council in its 22nd Meeting dt. 6 Oct. 2017 has recommended to increase the threshold limit of annual aggregate turnover for composition scheme from Rs. 75 lacs to Rs. 1 Crore to facilitate small taxpayers, traders, etc. (threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs).

The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31 March 2018. The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period. The increase in the turnover threshold will make it possible for greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.

Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

Further, a Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.

Accordingly, the CBEC has notified the increased threshold limit (from Rs. 75 lacs to Rs. 1 Crore) of aggregate annual turnover for composition scheme to facilitate small taxpayers, traders, etc. (threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, stands increased to Rs. 75 lacs from Rs. 50 lacs), as under:

Composition Threshold Limit Increased to 1 Crore: CBEC Notification 46/2017 Central Tax 13 Oct.

Composition Threshold Limit Increased to 1 Crore: CBEC Notification 16/2017 UT Tax 13 Oct.

CGST/ UTGST (Removal of Difficulties) Order, 2017 to Exclude Exempt Services from Aggregate Turnover for opting Composition Scheme

Government has issued the CGST/ UTGST (Removal of Difficulties) Order, 2017 to clarify that in computing aggregate turnover for eligibility to opt for composition scheme, the value of any exempt services including deposits, loans or advances with consideration as interest or discount, shall not be considered, as under:

CGST Removal of Difficulties Order 2017: CBEC Order No. 01/2017 Central Tax dt. 13 Oct. 2017

UT GST Removal of Difficulties Order 2017: CBEC Order No. 01/2017 UT Tax dt. 13 Oct. 2017

CBEC Notifies Turnover Limit for Composition Levy Registration under CGST/ UTGST

The CBEC has notified the Turnover Limit of Rs. 75 Lacs/ 50 Lacs for Composition Levy Registration under the CGST/ UTGST Act, 2017 along with exceptions, in line with the decision of the GST Council, as under:

Turnover Limit Composition Levy Registration: Central Tax Notification No. 8/2017 dt. 27 June 2017

G.S.R. 647(E).- In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of the Council, hereby prescribes that an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh rupees, may opt to pay, in lieu of the central tax payable by him, an amount calculated at the rate of,–

(i) one per cent of the turnover in State in case of a manufacturer,

(ii) two and a half per cent of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and

(iii) half per cent of the turnover in State in case of other suppliers:

Provided that the aggregate turnover in the preceding financial year shall be fifty lakh rupees in the case of an eligible registered person, registered under section 25 of the said Act, in any following States, namely:-

(i) Arunachal Pradesh, (ii) Assam, (iii) Manipur, (iv) Meghalaya, (v) Mizoram, (vi) Nagaland, (vii) Sikkim, (viii) Tripura, (ix) Himachal Pradesh:

Provided further that the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table:-

Tariff item, subheading, heading or Chapter Description
2105 00 00 Ice cream and other edible ice, whether or not containing cocoa
2106 90 20 Pan masala
24 All goods, i.e. Tobacco and manufactured tobacco substitutes

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

Turnover Limit Composition Levy Registration: UT Tax Notification No. 2/2017 dt. 27 June 2017

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