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Revision in Composition Scheme
Revision in Composition Scheme has been recommended by GST council in 22nd meeting held at New Delhi under the chairmanship of Mr. Arun Jaitley. Small and medium business houses are confused, annoying due to complexity of GST compliance and they need some help from Government. Some amount of oxygen given by the the council to MSME sector by announcing few relaxation in Composition Scheme under GST.

Point to Point Revision in Composition Scheme:

  • Increase in threshold limit of annual aggregate turnover for composition scheme from Rs. 75 lakh to Rs. 1 Crore. This threshold limit will be applicable to all State other than special category states but two state Jammu and Kashmir and Uttarkhand will enjoy turnover threshold limit of Rs. 1 Crore. The threshold limit of annual turnover shall be increase from Rs. 50 lakh to Rs. 75 lakh is applicable to special category states.

The increase in the turnover threshold will make it possible for greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.

  • This revision of threshold limit of turnover will be applicable to both migrated and new taxpayer till 31st March, 2018.
  • This option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. Example :  If taxpayer opts composition Scheme on 21st October, 2017,Composition Scheme will be operational from 1st November, 2017.
  • New taxpayer who opted this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period. In above example taxpayer is liable to file GSTR-4 return under composition scheme for the period of Nov-Dec, 2017 and shall file other returns as a normal taxpayer for the preceding tax period i.e October, 2017. In short taxpayer has to file 2 types returns when he opted Composition Scheme, one as a regular taxpayer and second as Composite taxpayer.
  • Persons who are otherwise eligible for composition scheme but are providing any exempt service were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

Example : XYZ Guest house is providing room, charging Rs. 990/- per room, per day (Exempted limit in GST Rs. 1000/- per day), along with providing room facility XYZ has a rooftop restaurant under same PAN. In present scenario XYZ is ineligible for composition scheme. After revision in Composition Scheme by GST council on 22nd October, 2017 XYZ Guest House is eligible for the Scheme even if XYZ is providing exempted Services of room for stay( Less than Rs. 1000/-per day , per room).

  • A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.
  • Due date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15.11.2017 from 18-10-2017.

Provision of Composition Scheme Other than above changes are remain the same . Refer our earlier articles on Composition Scheme….



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2 thoughts on “Revision in Composition Scheme by GST Council

  1. Nemish Shah says:

    Sir
    My aggregate turnover is more than rs. 1.5 cr. I have to file monthly returns.
    My purchase includes composite vendor also who has to file qtrly return, in that case how can i get ITC ?

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