Highlights:
The Goods and Services Council, which is chaired by Finance Minister and comprising state counterparts, has allowed such service providers towards opting for composition scheme as well as pay taxes at the reduced rate of 6%, which is beginning from 1st April 2019.
Extension of deadline for service providers
The tax department has extended the deadline by three months till 31st July for service providers with a turnover of up to Rs. 50 lakh towards opting for the composition scheme and pay 6% goods and services tax (GST).
The Goods and Services Council, which is chaired by Finance Minister and comprising state counterparts, has allowed such service providers towards opting for composition scheme as well as pay taxes at a reduced rate of six percent beginning from 1st April 2019.
This is against the higher rates of 12% as well as 18%, which was levied for most services under GST.
The Central Board of Indirect Taxes and Customs (CBIC), in a circular, stated that suppliers who want to opt for composition scheme are required to file Form GST CMP-02 by selecting 'any other supplier eligible for composition levy' latest by 31st July 2019.
The Circular by Central Board of Indirect Taxes and Customs (CBIC)
The Circular stated that, “a registered individual who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, might do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered individual as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 31st July 2019. Such individual would also furnish a statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (3) of rule 3 of the said rules.”
“(i) a registered individual who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, might do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered individual as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 31st July 2019. Such individual would also furnish a statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (3) of rule 3 of the said rules.”
It is requested that suitable trade notices might be issued to publicize the contents of this Circular.
The difficulty, if any, in implementation of this Circular must be brought to the notice of the Board.
Previously, Central Board of Indirect Taxes and Customs had issued a circular which stated that suppliers who want to opt for composition scheme are required to file Form GST CMP-02 by selecting ‘Any other supplier eligible for composition levy’ latest by 30th April 2019.
The service providers as well as suppliers of both goods and services with a turnover of up to Rs. 50 lakh shall be eligible towards opting for the GST Composition Scheme as well as pay a tax of 6 percent from 1st April. Earlier, the GST Council had suggested that the Composition Scheme, under which small traders, as well as businesses, pay a 1% tax based on turnover, could be availed by businesses with a turnover of Rs. 1.5 crores.
GST under the scheme for traders and manufacturers
Under the scheme, traders, as well as manufacturers, are required to pay only 1% GST on goods which otherwise attract a higher levy of either 5%, 12% or 18%. Such dealers are also not allowed to charge GST from the customers.
Of the 1.22 crore businesses registered under GST, about 17.5 lakh so far have opted for the composition scheme.
The Finance Ministry
Prime Minister Narendra Modi led Bharatiya Janata Party (BJP) have claimed a landslide victory in the 17th Lok Sabha 2019 elections. Nirmala Sitharaman, who served as the full-time Defence Minister of India in the Narendra Modi government from September 2017 to May 2019, has been appointed as the new finance minister in this 2 and term of the Modi Government. The Union Finance Minister Nirmala Sitharaman held her first GST Council meeting on 21st June 2019. Nirmala Sitharaman has been appointed as the new finance minister in this 2nd term of the Modi Government and stepped into the shoes of the former Union Finance Minister Arun Jaitley who opted out of the ministerial position in the new government on health grounds.
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