GoM for 12% GST on AC eateries, composition scheme tax cut
Team Udayavani, Oct 30, 2017, 9:21 AM IST
New Delhi: The ministerial panel working to make GST composition scheme more attractive today suggested slashing tax rate to 1 per cent for manufacturers and restaurants, while easier norms for traders opting for it. Currently, manufacturers and restaurants with turnover up to Rs 1 crore pay GST under composition scheme at 2 per cent and 5 per cent respectively. The same for traders is 1 per cent.
In its second meeting, the Group of Ministers, headed by Assam Finance Minister Himanta Biswa Sarma, today also suggested doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under composition scheme, and tax them at 12 per cent with input credit. It also suggested that eating out at hotels, which has room tariff of more than Rs 7,500, should attract an uniform 18 per cent tax rate instead of any separate category for 5- star hotel.
The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising his state counterparts, on November 10 in Guwahati is likely to take up the recommendations of the GoM, which was set up earlier this month. With regard to traders, the GoM suggested two prongedapproach for taxation under the composition scheme.
It suggested that traders who want to exclude the sale proceeds of tax-free items from its turnover, it can pay 1 per cent GST (Goods and Services Tax). However, those traders who pay tax on total turnover, the tax rate has been proposed at 0.5 per cent.
For example, supposing a trader deals in goods which are tax exempt as well as those which are taxable under the GST and has a turnover of Rs 1 crore. Of this, Rs 40 lakh turnover is from sale of tax-exempt items and remaining Rs 60 lakh from taxable goods. So, traders deciding to pay tax on total Rs 1 crore turnover can pay 0.5 per cent, while those wanting to pay tax on Rs 60 lakh can cough up 1 per cent GST.
“The GoM decided that tax rates under composition scheme for restaurants and manufacturers be lowered to 1 per cent. For traders the ministerial group suggested two tax rates,” an official told PTI. The GoM also recommended allowing businesses who are engaged in inter-state sale to avail the composition scheme, he added.
Around 15 lakh businesses opted for composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy under the Goods and Services Tax (GST) which rolled out from July 1. There are over 1 crore businesses registered under GST.
Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1 crore. This threshold was earlier Rs 75 lakh and the GST Council earlier this month raised it to Rs 1 crore from October 1.
While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to file only one return and pay taxes on a quarterly basis. Also, a composition taxpayer is not required to keep detailed records that a normal taxpayer is supposed to maintain.
The GoM was tasked with revisiting the tax structure of different categories of restaurants with the aim of rationalising or reducing the rates, apart from making composition scheme more attractive for businesses. Currently, GST is levied at 12 per cent on non-AC restaurants, while it is 18 per cent for air-conditioned ones.
The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal. The GoM has also suggested that manufacturers engaged in job works can be allowed to opt for composition scheme, the official added.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Rewind 2024: Mutual fund industry on a high; asset surges Rs 17 lakh crore this year
Epigamia founder Rohan Mirchandani dies of cardiac arrest at age 42
Lohia Auto launches EV brand ‘Youdha’, aims to sell 3 lakh vehicles by 2027
“FM ji FM ji, itna tax main kaise bharun”, asks investor Vijay Kedia in viral post
RBI: After another status quo year, all eyes on a growth-propping rate cut with new Guv at helm
MUST WATCH
Latest Additions
BJP accuses Kejriwal of deception over ‘Sanjeevani’ and ‘Mahila Samman’ schemes
Theatre stampede case: Police grill actor Allu Arjun for over 3 hrs; ask about sequence of events
Karnataka CM Siddaramaiah wishes Shivarajkumar speedy recovery
HC asks Centre’s response on plea of Yuvraj Singh’s NGO seeking FCRA renewal
Rafi a musical genius, his cultural influence transcends generations: PM Modi
Thanks for visiting Udayavani
You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.