Businesses opting for the composition scheme, which offers simpler compliance and concessional tax liability for small taxpayers under the GST, saw a surge in the last fortnight with numbers ballooning nearly six times to 5.12 lakh after a lukewarm response initially.
Businesses opting for the composition scheme, which offers simpler compliance and concessional tax liability for small taxpayers under the GST, saw a surge in the last fortnight with numbers ballooning nearly six times to 5.12 lakh after a lukewarm response initially. On July 16, the number of firms which opted for the scheme stood at 90,000 after registrations were opened eleven days ago.“The figure of dealers opting for composition in GST is 5.12 lakh up to 30th (July). The last date for opting is August 16,” revenue secretary Hasmukh Adhia tweeted on Monday. The response to the scheme at the start had forced the government to extend the deadline from July 22 earlier.
GSTN chairman Navin Kumar had earlier told FE that businesses not being allowed to make inter-state supplies under the scheme could have been a reason for a poor response. “The 5.12 lakh registrants under the composition scheme includes firms that have migrated from earlier regime as well as those that have registered as new taxpayers,” Kumar told FE on Monday.The composition scheme is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh — Rs 50 lakh in the case of eight north-eastern states and Himachal Pradesh. According to the CGST Act, businesses are eligible to opt for the composition scheme if a person is not engaged in any inter-state outward supplies of goods and not into making any supply of goods through an electronic commerce operator which is required to collect tax at source.
Moreover, while a regular person has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain.The scheme is optional under which manufacturers other than those of ice cream, pan masala and tobacco products have to pay a 2% tax on their annual turnover. The tax rate is 5% for restaurant services and 1% for traders. Separately, nearly 71 lakh excise, service tax and VAT assessees have migrated to the GST Network till July 25. Besides, another 12 lakh new registrations came about under the GST.