The tax department has given service providers with a turnover of up to Rs 50 lakh time till April 30 to opt for the composition scheme and pay 6 percent GST.
The option to pay Goods and Services Tax (GST) at a reduced rate of 6 percent would be effective from the beginning of the financial year or from the date of obtaining new registration during the financial year.
Service providers opting for the composition scheme can charge a lower tax rate of 6 percent from customers, as against the higher rates of 12 and 18 percent for most services under GST.
In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said suppliers who want to opt for composition scheme would have to file Form GST CMP-02 by selecting ‘Any other supplier eligible for composition levy’ latest by April 30, 2019.
Businesses which apply for new registration may avail the said benefit in Form GST REG-01 at the time of filing application for registration.
AMRG & Associates Partner Rajat Mohan said “numerous service providers tried to file this intimation opting composition scheme recently but were denied due to a legal embargo. Now with this clarification, GSTN would start accepting the intimations soon”.
The GST Council, headed by Finance Minister Arun Jaitley and comprising state ministers, in its meeting on January 10 had permitted service providers and those dealing in both goods and services with a turnover of up to Rs 50 lakh to opt for composition scheme with effect from April 1.
The GST composition scheme was so far available to traders and manufacturers of goods with an annual turnover of up to Rs 1 crore.
This threshold too has increased to Rs 1.5 crore from April 1.
Under the scheme, traders and manufacturers are required to pay only 1 percent GST on goods which otherwise attract a higher levy of either 5, 12 or 18 percent. Such dealers are also not permitted to charge GST from the purchaser.
Of the 1.20 crore businesses registered under GST, about 20 lakh have so far opted for the composition scheme.
Source: Economic Times.