GST Composition Scheme
- Blog|GST & Customs|
- 650 Views
- 4 Min Read
- By Taxmann
- Last Updated on 31 December, 2020
What is Composition Scheme?
Aggregate Turnover Limits for availing the Composition Scheme under GST:
The composition scheme is an optional scheme in the hands of the eligible registered taxable person given under the GST Act, 2017. The aggregate turnover of the preceding financial year needs to be seen.
1. INR 50 Lakhs was the upper limit:
Initially at the outset of GST era, the aforesaid limit was INR 50,00,000/-. The said limit is defined in the GST Act itself with the provision that the same can be increased by the Government to an amount not exceeding INR 1 Crore based on the recommendation of the GST Council as per proviso to Section 10(1). The GST Act reserves the power in the GST Act i.e. based on the recommendation of GST Council, the Government may increase this limit by way of Notification.
2. Increment from INR 50 lakhs to 75 lakhs:
In this context, the Central Government vide Notification No. 8/2017- Central Tax dated 27th June, 2017 by evoking the power under the aforesaid section has increased this limit to INR 75,00,000/-.
3. Recommendation for increment from INR 75 lakhs to 1 crore:
However, as the limit was too small to make it attractive for the taxpayers to avail this scheme i.e. out of 98 lakhs business registered in GST regime only 15.5 lakh(approx..) opted for composition scheme (as on October, 2017), hence, the GST Council vide its 22nd meeting held at New Delhi on 6th October, 2017 has made the recommendation to stretch this limit from INR 75,00,000/- to INR 1 crore, so as to ensure that maximum taxpayers having turnover below INR 1 crore opt for the composition scheme. – Press Information Bureau, Ministry of Finance, Government of India dated 6th October, 2017. – Notification No. 46/2017- Central Tax dated 13th October, 2017. For detailed information on GST Composition Scheme, buy GST books online
Aggregate Turnover Limits for availing the Scheme – For Special Category States:
Rate of tax under Composition Scheme
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