The following changes were recommended in the Composition Scheme on the basis of discussions held in the 23rd meeting of the GST Council held at Guwahati today.

 

i. Uniform rate of tax @ 1% under composition scheme for manufacturers andtraders (for traders, turnover will be counted only for supply of taxable goods). No change for composition scheme for restaurant.

ii. Supply of services by Composition taxpayer upto ₹ 5 lakh per annum will be allowed by exempting the same

iii. Annual turnover eligibility for composition scheme will be increased to ₹ 2 crore from the present limit of ₹ 1 crore under the law. Thereafter, eligibility for composition will be increased to ₹ 1.5 Crore per annum.

iv. The changes recommended by GST Council at (ii) and (iii) above will be implemented only after the necessary amendment of the CGST Act and SGST Acts.

Composition scheme reform: uniform low rate for manufacturers and traders and service exemption subject to legislative amendment. Changes to the Composition Scheme propose a uniform tax rate of 1% for manufacturers and traders, with traders' turnover counted only for taxable goods; restaurants remain unchanged. Supplies of services by a composition taxpayer up to a specified annual threshold would be exempt. The Council proposes raising annual turnover eligibility and a subsequent staged increase, but the service exemption and turnover-eligibility changes will be implemented only after amendments to the CGST Act and SGST Acts.