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Press Release

Date: November 10, 2017
Subject: GST Council Proposes Key Reforms in Composition Scheme to Benefit Small Taxpayers
Description:

The GST Council, in its 23rd meeting held at Guwahati on 10 November 2017, recommended significant changes to the Composition Scheme with the objective of simplifying compliance and providing greater relief to small manufacturers, traders, and businesses. A major decision was the proposal to introduce a uniform composition tax rate of 1 percent for manufacturers and traders, with turnover for traders to be calculated only on the supply of taxable goods, while the existing composition scheme for restaurants was left unchanged. To provide additional operational flexibility, the Council recommended allowing composition taxpayers to supply services up to a value of Rs. 5 lakh per annum by exempting such supplies from GST. The eligibility threshold for opting into the Composition Scheme was also proposed to be enhanced substantially, with an initial increase to Rs. 2 crore from the existing limit of Rs. 1 crore, followed by a revised eligibility cap of Rs. 1.5 crore per annum. The Council clarified that the proposed relaxation relating to service supply and the enhancement of the turnover limit would be implemented only after the required amendments are made to the CGST Act and the respective State GST Acts. These recommendations reflected the Council’s intent to reduce compliance burden, widen the coverage of the Composition Scheme, and make GST more business-friendly for small taxpayers.

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