500,000 register under composition scheme, IGST from imports hit 20,000 cr

Nearly 7.1 mn excise, service tax and VAT assessees have migrated to the GST Network till July 25

Over half-a-million businesses have opted for the goods and services tax (GST) composition scheme, which allows them to pay taxes at a concessional rate and makes compliance easy, the government informed on Monday. 

The collection of Integrated GST from imports crossed Rs 20,000 crore in July that shows a steep hike in revenues, reported The Economic Times. This marks a 60 per cent rise in imports in just one month of GST.
 

The total customs revenues in the month stood at Rs 26,500 crore, whereas in the same month last year, the figure was Rs 16,625 crore.

This rise should help the government in taking care of any decline in GST collection due to product-related disruption, the business daily reported.

While there are apprehensions of revenue taking a hit due to sluggish sales in the first month of GST, the final analysis would be done by Central Board of Excise and Customs

Nearly 7.1 million excise, service tax and value added tax (VAT) assessees have migrated to the GST Network (GSTN) till July 25. Moreover, another 1.2 million new registrations came about under the tax regime.

The government had earlier extended the deadline till August 16 for businesses to opt for composition scheme under the GST regime. 

What is the composition scheme?

The composition scheme is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh (Rs 50 lakh in the case of eight north-eastern states and the hilly state of Himachal Pradesh). The objective behind it is to bring simplicity and reduce the compliance cost for small taxpayers. 

Manufacturers, under the scheme, other than those of ice cream, pan masala and tobacco products have to pay a 2 per cent tax on their annual turnover. The tax rate is 5 per cent for restaurant services and 1 per cent for traders. 

As per the Central GST Act, businesses are eligible to opt for the composition scheme if a person is not engaged in any inter-state outward supplies of goods and not into making any supply of goods through an electronic commerce operator who is required to collect tax at source. 

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 traders under the Composition Scheme would not be entitled to input tax credit.

Moreover, a trader will have to mention that he is a "composition taxable person" on notice or signboard displayed at a prominent place at his business premises.

Also, on the bill of supply, the trader needs to mention that he is a "composition taxable person, not eligible to collect tax on supplies".

With the introduction of GST, the government has subsumed 17 different Centre and state levies and 23 cesses from July 1 in an attempt to unite India into one single market.