NEW DELHI :
The tax department has given service providers with turnover of up to ₹50 lakh time till 30 April to opt for the composition scheme and pay 6% GST.
The option to pay Goods and Services Tax (GST) at reduced rate of 6% would be effective from the beginning of the financial year or from the date of obtaining new registration during the financial year.
Service providers opting for the composition scheme can charge a lower tax rate of 6% from customers, as against the higher rates of 12 and 18% for most services under GST.
In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said suppliers who want to opt for composition scheme would have to file Form GST CMP-02 by selecting 'Any other supplier eligible for composition levy' latest by 30 April, 2019.
Businesses which apply for new registration may avail the said benefit in Form GST REG-01 at the time of filing application for registration.
AMRG & Associates Partner Rajat Mohan said "numerous service providers tried to file this intimation opting composition scheme recently but were denied due to a legal embargo. Now with this clarification, GSTN would start accepting the intimations soon".
The GST Council, headed by Finance Minister Arun Jaitley and comprising state ministers, in its meeting on January 10 had permitted service providers and those dealing in both goods and services with a turnover of up to ₹50 lakh to opt for composition scheme with effect from 1 April.
The GST composition scheme was so far available to traders and manufacturers of goods with an annual turnover of up to ₹1 crore.
This threshold too has increased to ₹1.5 crore from 1 April.
Under the scheme, traders and manufacturers are required to pay only 1 per cent GST on goods which otherwise attract a higher levy of either 5, 12 or 18%. Such dealers are also not permitted to charge GST from the purchaser.
Of the 1.20 crore businesses registered under GST, about 20 lakh have so far opted for the composition scheme.
This story has been published from a wire agency feed without modifications to the text.