GST Council recommends increasing the yearly aggregate turnover criteria for composition scheme from Rs. 75 lacs to Rs. 1 Crore in its 22nd meeting on 06/10/2017 (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 31/03/2018. 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).
CBEC Central Tax Notification 46/2017 dt. 13/10/2017: Composition Threshold Limit Increased to 1 Crore
CBEC UT Tax Notification 16/2017 13/10/2017: Composition Threshold Limit Increased to 1 Crore
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.
CBEC Central Tax ROD Order 1/2017 dt. 13/10/2017: Exempt Services Excluded from Aggregate Turnover for opting Composition Scheme
CBEC UT Tax ROD Order 1/2017 dt. 13/10/2017: Exempt Services Excluded from Aggregate Turnover for opting Composition Scheme
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:
CBEC Central Tax Notification 8/2017 dt. 27/06/2017: Turnover Limit Composition Levy Registration notified
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|
(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.
CBEC UT Tax Notification 2/2017 dt. 27/06/2017: Turnover Limit Composition Levy Registration
Composition Scheme Threshold Limit Increased to Rs. 1.5 Crore for Suppliers of Goods under GST (dt. 07/03/2019)