Goods Services Tax is the new concept introduced in the Indian market which is related to taxes. Soon after the introduction of these concepts, a lot of things are happing to and fro to make the rules under this concept quite convenient for every person. Earlier this year, the government raised the GST composition Scheme limit for manufacturers of goods to Rs. 1.5 crore from Rs. 1 crore.
This is the scheme that has relaxed the tax compliances and payments for individuals. This is one such scheme that provides some great benefits for B2B businesses and even B2C business types. Every person who is into business or any profession must know about direct taxation in India.
GST composition scheme is a scheme offered to all small-scale businesses. If you compare this with the regular GST filing, it provides the business with two benefits i.e. A lot of reduction in paperwork and lower tax liability. If a person applies for a composition scheme, the filling gets very easier as there is just a need to apply one quarterly return under GSTR 4 and one annual return under GSTR 9A.
According to the rules, only manufacturing, and service businessmen and traders can register themselves under the GST composition scheme. Here are some of the exemptions related to this. Let’s have a look at them.
- All the individuals and the businesses that supply all the goods through the e-commerce platforms and collect tax at the source
- Non-residents taxable people and even casual taxable persons
- Manufacturers related to ice creams and edible ice without cocoa or any additives
- All the suppliers that supply goods that are exempted under the GST act
- All the manufacturers that are into pan masala and tobacco products
- All the businesses who make their purchases from unregistered suppliers
All these are true exemptions from the GST composition scheme. All the other taxpayers can opt to be registered under the GST composition scheme. Just make sure that the business annual turnover falls under the specified limits. Here is the list of manufacturers or traders that can get registered under the composite scheme. Let’s have a look at them.
- Foodservice unit
- Small manufacturing unit
- Truck operators
- Repair shop
- Fruit and vegetable vendor
- Service sector unit and many more
The composition scheme has a limit depending upon the GST that varies according to the type of business. Let’s have a look at them.
- For the newly registered business in the manufacturing and trading sector, their turnover should not exceed the limit of Rs. 1.5 crore in the current financial year. If the business is already registered, its turnover should not exceed Rs. 1.5 crore in the previous financial year.
- There is no limit applied to restaurants that do not serve alcohol
- For all the new registered service providers the turnover should not be more than Rs. 50 lakhs in the current financial year and if it is already registered, then the previous financial year’s turnover must be more than Rs. 50 lakhs.
Some special categories get further limits for this. It will be great to get in touch with the best direct taxation company in Pune that can provide all the latest information about GST.