RECOMMENDATIONS REGARDING THE COMPOSITION LEVY AND GST

RATE ON CERTAIN GOODS

[As per discussions in the 17th GST Council Meeting held on 18th June, 2017]

I. The Turnover Limit for the Composition Levy:

1. The GST Council, in its meeting held on 11th June, 2017, had recommended increase in the turnover limit for Composition Levy for CGST and SGST purposes from ₹ 50 lakh to ₹ 75 lakh for all eligible registered persons. However, no clear view was taken as to whether or not this increased turnover limit will apply in case of Special Category States.

2. In its meeting held on 18th June, 2017, the GST Council has recommended that the turnover limit for Composition Levy for CGST and SGST purposes shall be ₹ 50 lakh in respect of the following Special Category States namely:

1. Arunachal Pradesh,

2. Assam,

3. Manipur,

4. Meghalaya,

5. Mizoram,

6. Nagaland,

7. Sikkim,

8. Tripura, and

9. Himachal Pradesh.

3. The Council has also recommended that in case of Uttarakhand, the turnover limit for Composition Levy for CGST and SGST purposes will be ₹ 75 lakh.

4. For the State of Jammu & Kashmir the turnover limit for the Composition levy will be decided in due course.

II. Manufacturers of goods who will not be eligible for Composition Levy:

The GST Council has also recommended that manufacturers of the following goods shall not be eligible for the Composition Levy:

S. No.	Classification (Tariff item / Chapter)	Description
1	2105 00 00	Ice cream and other edible ice, whether or not containing cocoa.
2	2106 90 20	Pan masala
3	24	Tobacco and manufactured tobacco substitutes

III. GST RATE ON CERTAIN GOODS:

1. The GST Council also recommended that the GST rate on dried singhada and makhana will be 5%.

Composition levy turnover limit varies across states; special category states retain lower threshold, and some manufacturers are excluded. The recommendations set differentiated Composition Levy turnover thresholds for CGST and SGST-retaining a lower threshold for listed Special Category States, a higher threshold for Uttarakhand, and deferring the decision for Jammu & Kashmir-and identify manufacturers of ice cream and other edible ice, pan masala, and tobacco and manufactured tobacco substitutes as ineligible for the composition scheme; additionally, a GST rate of 5% on dried singhada and makhana is recommended.