Manufacturers – Now pay 50% less GST
by Paras Mehra 3K
Manufacturers! We have good news for you this New Year as the government has decided to reduce the GST tax on manufacturers by 50% under composition scheme in line with the traders. Earlier, each manufacturer needs to pay 2% GST under composition scheme, however, now the government has reduced the composition rate from existing 2% to 1% i.e. 50% rate reduction.
What is a composition scheme?
Composition scheme is the benefit extended to small-scale taxpayers i.e. those having the turnover of Rs.1 crore which is being planned to increase to Rs.1.5 crore.
Who are all covered under Composition scheme?
Manufacturers and traders are eligible to apply for composition scheme i.e. to pay tax at a concessional rate. Service providers are not covered under composition scheme except restaurant business.
Current rate of GST under Composition scheme
The present rate structure for composition scheme is as follows:
- Traders 1%
- Manufacturers 1%
- Restaurant business 5%
Why the GST rate has been reduced?
The rates have been reduced to benefit the small-scale business. The dealers manufacturing and selling goods under GST cannot collect it from the customer and hence, the reduction in rate will directly benefit the manufacturers in the economy.
Conclusion
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