Big Relief to Small Taxpayers In GST Composition Scheme.

 Government of India has made significant and important changes in composition scheme wef 01.01.2018 regarding tax rate and value of turnover for calculation of tax.Big relief has been given to small taxpayers in GST Composition Scheme from April 2018 

CHANGES IN RATE OF TAX AND VALUE OF TURNOVER FOR COMPOSITE DEALERS

 CBIC has issued a Notification No 1/2018 – CT dated 01/01/2018 dt 01.01.2018 prescribing the rate of tax for composite dealers and turnover for calculating tax. Let’s Discuss….. 

Text of notification is reproduced below:

 “In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.8/2017- Central Tax, dated the 27 th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 647 (E), dated the 27 th June, 2017, namely:- In the said notification, in the opening paragraph, –  (a) in clause (i), for the words “one per cent.”, the words “half per cent.” shall be substituted; (b) in clause (iii), for the words “half per cent. of the turnover”, the words “half per cent. of the turnover of taxable supplies of goods” shall be substituted. In the above notification Tax Rate for composite dealers has been reduced from 1% to .5% for CGST  for Taxpayers specified in Clause (i) of Notification of 8/2017 CT dated 27th June 2017. In simple words , Tax rate for MANUFACTURERS OTHER THAN TRADERS has been reduced from 1% to .5% .  In the same notification in point (b) it has been provided that for the words “HALF PERCENT OF THE TURNOVER“ the words “HALF PERCENT OF TURNOVER OF TAXABLE SUPPLIES“ shall be substituted in clause (iii) of Notification No 8/2017- CT dated 27.06.2017. In simple words, For Traders who have opted for composite scheme will have to pay tax @ .5% CGST and .5% SGST only on TAXABLE SUPPLIES and the value of exempt supplies will not be included in turnover for calculating tax from 01.01.2018.  Also Read : GST NEW RETURN (GST RET 1) Also Read : CHANGES IN GST