Under Assam Finance Minister, Himanta Biswa Sarma, a group of ministers (GOM) has been set up to amend the composition scheme more attractively so as to revisit the goods and services tax rates on restaurants. The GST Council, Chaired by Arun Jaitley shall submit its report in 2 weeks.
With only 15.5 lakh of the total 98 lakh businesses registered under the GST regime opting for the composition scheme, the GST Council decided to set up the GoM to examine measures to make it more attractive.
Reported, businesses with annual turnover of Rs.1crore can opt for the composition scheme and pay the taxes at the rate 1-5% along with the quarterly filing of taxes. The GOM shall also be taking into consideration about revising the tax structure of different categories of restaurants. Currently, GST is levied at 12% on non-AC restaurants while it is 18% in case of air-conditioned ones. The GoM will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they don’t, whether they should be disallowed input tax credit claims.
The GOM shall emphasis on whether the turnover of exempted goods can be excluded from the total turnover threshold for levying tax under the composition scheme to make the scheme more attractive. It will examine whether the scheme can be extended to taxpayers dealing in inter-state supplies of goods and whether the manufacturers opting for it can be given the benefit of input tax credit.
Sources –The Economic Times
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