The tax department has given service providers with turnover of up to Rs 50 lakh time till April 30 to opt for the composition scheme and pay 6 per cent GST.
The option to pay Goods and Services Tax (GST) at reducedrate of 6 per cent would be effective from the beginning of the financial year orfrom the date of obtaining new registration during the financial year.
Service providers opting for the composition scheme cancharge a lower tax rate of 6 per cent from customers, as against the higherrates of 12 and 18 per cent for most services under GST.
In a circular, the Central Board of Indirect Taxes andCustoms (CBIC) said suppliers who want to opt for composition scheme would haveto file Form GST CMP-02 by selecting ‘Any other supplier eligible forcomposition levy’ latest by April 30, 2019.
Businesses which apply for new registration may avail thesaid benefit in Form GST REG-01 at the time of filing application forregistration.
AMRG & Associates Partner Rajat Mohan said”numerous service providers tried to file this intimation opting compositionscheme recently but were denied due to a legal embargo. Now with thisclarification, GSTN would start accepting the intimations soon”.
The GST Council, headed by Finance Minister Arun Jaitley andcomprising state ministers, in its meeting on January 10 had permitted serviceproviders and those dealing in both goods and services with a turnover of up toRs 50 lakh to opt for composition scheme with effect from April 1.
The GST composition scheme was so far available to tradersand manufacturers of goods with an annual turnover of up to Rs 1 crore.
This threshold too has increased to Rs 1.5 crore from April1.
Under the scheme, traders and manufacturers are required topay only 1 per cent GST on goods which otherwise attract a higher levy ofeither 5, 12 or 18 per cent. Such dealers are also not permitted to charge GSTfrom the purchaser.
Of the 1.20 crore businesses registered under GST, about 20 lakh have so far opted for the composition scheme.