Composition Scheme Rediscussed by GOM
It’s been just over a week since the last GST Council meeting [October 7th], chaired by the finance minister, Sh. Arun Jaitley, formed a special group of ministers [GoM] especially for overseeing, fine-tuning and making the composition scheme more befitting and benefiting for the SMB, start-ups and the business community at large.
The high level GoM is led by Assam Finance Minister, Sh. Himanta Biswa Sharma with Bihar Deputy Chief Minister, Sh. Sushil Modi, J & K finance minister Sh. Haseeb Drabu, Punjab finance minister Sh. Manpreet Singh Badal and Chhattisgarh minister of commercial taxes Sh. Amar Agrawal.
The committee which is tasked to explore, evolve and make the composition scheme more rewarding to inject it into a larger and deeper strata of the society, met for the first time on 15th October, Sunday to discuss the framework. The 5 member GoM has to present their final report by the end of November to the GST Council suggesting specific methods and technique for evolving the Composition scheme.
It is imperative to note that approximately only a meagre of [13-14] % of the registered tax payers in GST have opted for the composition scheme, precisely 1.5 million of the 9.8 million registered, which is conservative.
Currently, the businesses with an annual turnover of Rs. 1 crore can opt for the composition scheme and pay taxes in the range of 1 – 5 %. [Traders – 1%, manufacturers -2% and restaurants – 5%]. The GoM might like to tweak in on both the parameters and augment it by adding more features and benefits. An aspect, which will find its way among intense discussions is, whether the turn-over of exempted goods can be excluded from the total turn-over for tax purposes. Allowance of Input Tax Credit to the Composition Scheme and inclusion of inter-state supplies in it, can also be one of the key factors of the discussion.
Along with the Composition Scheme, The GoM is also tasked to explore the tax slabs and other intricacies, complexities and possibilities around the taxation of the AC and non AC restaurants.