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GST Compensation Scheme: Last two days to take no
hassle low tax option, here’s how taxpayers can apply
Small businesses such as fruits and vegetable vendors,
shopkeepers, and small trading and manufacturing
businesses can reap benefits from this simplified tax
filing scheme. The tax rates range from 1% to 6% of the
business’ turnover.
Businesses that choose to
opt for a simplified way of paying their GST (Goods and
Services Tax) have time until Thursday, March 31, to
apply for the central government’s GST Compensation
Scheme. Under the scheme, suppliers of both goods and
services with aggregate annual turnover of upto Rs 1.5
crore can opt in for the scheme, to pay taxes for the
upcoming FY 2023
Small businesses such as
manufacturers of goods, dealers and restaurants (not
serving alcohol) can opt for the scheme. For instance,
fruits and vegetable vendors, shopkeepers, and small
trading and manufacturing businesses can reap benefits
from this simplified tax filing scheme. According to the
central government, this scheme will help taxpayers to
save on numerous compliance norms, lessen their
bookkeeping work, and offer reduced tax rates.
Small businesses such as manufacturers of goods, dealers
and restaurants (not serving alcohol) can opt for the
scheme. For instance, fruits and vegetable vendors,
shopkeepers, and small trading and manufacturing
businesses can reap benefits from this simplified tax
filing scheme. According to the central government, this
scheme will help taxpayers to save on numerous
compliance norms, lessen their bookkeeping work, and
offer reduced tax rates
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What are the tax rates?
The tax rates range from
1% to 6% of the business’ turnover and vary depending on
the type of business. For instance, restaurants which
are not serving alcohol will be taxed 5% GST. For goods
manufacturers and traders a tax of 1% will be
applicable, while for service providers the effective
GST tax rate will be 6%.
Who is eligible for the GST Composition scheme?
Supplier of Goods, registered in states such as
North-Eastern states and Himachal Pradesh can apply for
the scheme if their company’s turnover is up to Rs 75
lakhs, while for all the other states, the companies can
apply for the scheme if their turnover is up to Rs 1.50
crore.
For suppliers of services, if they have dealt with
services from the fiscal year 2020 onwards and if their
turnover is upto Rs 50 lakhs, they can opt for the
scheme
Who is not eligible for the scheme?
A taxpayer or a taxpaying business cannot opt for the
Composition scheme i) if they supply goods which are not
liable to be taxed under the GST Act, such as tobacco,
pan masala or ice cream makers,ii) if the supplies is
through e-commerce operators, iii) if they are
non-resident foreign taxpayer, iv) if they are a person
registered as TDS deductor/tax collector and v) if they
are making inter-state supplies.
What are the steps to avail the scheme?
A taxpayer can opt for the the scheme in three steps:
Step 1: Log in to the Taxpayers’ interface ie www
dot Gst dot gov dot in
Step 2: First go to the Services section on top,
then select the ‘Registration’ option, and finally
select the ‘Application to Opt for Composition Levy’
option.
Step 3: Fill in the GST-CMP-02 form. Also, click
on the ‘Composition Declaration’ and ‘Verification’
checkboxes. Fill in the name of authorized signatory,
type the place and click on Save. And finally submit the
form.
Additionally, file stock intimations
Additionally, a taxpayer would also be needed to submit
their stock intimation records within 30 days of opting
for the scheme. It would be required to furnish the
details of stock including inward supply of goods from
unregistered persons, held by the taxpayer on the day
preceding the date from which you opt to pay the
composition amount. The authorities may not actively
check if the taxpayer has submitted the stock intimation
but if the intimation is not filed, the business would
compulsorily be pushed out of the scheme.
Source:::FINANCIAL EXPRESS,
dated 30/03/2022.
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