Assam Finance Minister Himanta Biswa Sarma will head the group of ministers (GoM) of state finance ministers that have been set up to look into various issues pertaining to a scheme for small taxpayers under the Goods and Services Tax (GST), also known as the composition scheme.
The GoM will also look into the proposal to reducing GST rates on air-conditioned restaurants from 18 percent to 12 percent.
Deputy Chief Minister of Bihar Sushil Modi, Jammu & Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Haseeb Drabu and Chattisgarh’s Commercial Taxes Minister Amar Agarwal will be a part of the GoM.
Composition scheme is an alternate method of taxation, which allows small businesses with annual turnover up to Rs 75 lakhs, to pay tax at a concessional rate, as well as reduce the compliance cost. The revenue threshold is Rs 50 lakhs for dealers across nine states such as Arunachal Pradesh, Nagaland, Tripura, among others. The enrollment into the plan is, however, optional.
On Friday, the GST Council headed by Finance Minister Arun Jaitley decided to raise the annual turnover threshold on the scheme to Rs 1 crore and reopen its registration for the third time till March 31, 2018.
Under the scheme, traders, manufacturers and restaurants can pay tax at 1, 2 and 5 percent, respectively. The move to widen the turnover threshold is aimed at easing the compliance burden for taxpayers as they will have to file returns only once in a quarter as against monthly returns that need to be filed by other normal taxpayers.