A group of ministers on Sunday proposed relaxing the Goods and Service Tax rates for businesses eligible for the composition scheme, PTI reported. The panel suggested a tax rate of 1% for manufacturers and restaurants with annual turnover of Rs 1 crore or less. They currently pay 2% and 5% of their turnover as GST.
By opting for the composition scheme, small taxpayers can avoid tedious paperwork and pay GST at a fixed rate of their turnover.
The group of ministers, headed by Assam Finance Minister Himanta Biswa Sarma, met for the second time on Sunday, and its recommendations may be considered when the GST Council meets next on November 9-10. At its first meeting on October 15, the panel had discussed levying a uniform tax rate of 12% for both air-conditioned and non-AC restaurants.
On Sunday, the panel also recommended allowing more businesses to be eligible for the composition scheme, by raising the annual turnover threshold to Rs 1.5 crore, Mint reported.
Besides Sarma, the ministerial panel includes Bihar Deputy Chief Minister Sushil Kumar Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, his Punjab counterpart Manpreet Singh Badal and Chhattisgarh Commercial Taxes Minister Amar Agrawal.