Manufacturers are having relief as the government has decided that as per the composition scheme, there will be 1% GST against 2 percent earlier.
The government has notified lower 1 percent GST rates for manufacturers who have opted for composition schemes as well as easier norms for traders opting for it.
The finance ministry has notified the changes decided by the GST Council in November 2017. As per the notification manufacturers who have opted for the composition scheme will now have to pay 1 percent Goods and Services Tax (GST) as against 2 percent earlier.
On the other hand, traders opting for a composition scheme would now have to pay the tax at 1 percent on their turnover of taxable supplies. Till now, traders had to pay GST on total turnover, which included turnover from exempt supplies like fruits, vegetables.
Till now over 15 lakh businesses have opted for a composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the Goods and Services Tax (GST) which rolled out on July 1. And as per the records, there are over 90 lakh businesses registered under GST.
Currently, a regular taxpayer has to pay taxes every month, a composition supplier is required to file only one return and pay taxes quarterly. Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain.
The composition scheme is open for manufacturers, restaurants, and traders whose turnover does not exceed Rs. 1.5 crore.
The Council, in its November meeting, increased the threshold for composition scheme to Rs. 1.5 crore and also decided to amend the GST law to raise the statutory threshold to Rs. 2 crores.