Current Affairs

Last Date Extended for Alternate Composition Scheme

  • Ministry: Ministry of Finance 
  • About: Alternate composition scheme is a tax levy method under GST designed for small taxpayers.
Last Date Extended for Alternate Composition Scheme
  • Objective: To bring simplicity and reduce compliance cost for small taxpayers

Features:

  • Manufacturers or traders with a taxable business turnover of up to Rs 1.5 crore are eligible for the scheme. The turnover limit is Rs 75 Lakh for the North-Eastern States
  • For the service provider, the taxable business turnover is up to Rs 50 Lakh
  • Under this scheme, the person can pay tax every quarter at a flat percentage of turnover, instead of paying tax at a normal rate every month
  • The composition scheme applies tax rates at 1% (0.5% CGST and 0.5% SGST) on turnover for manufacturers and traders, 5 % on restaurants (not serving alcohol) and 6% for other service providers
  • The registered taxpayer has to provide a declaration on the GST portal before the beginning of each financial year to be eligible for the composition scheme
  • The person registered under the composition scheme cannot collect GST from customers
  • Under the scheme, the taxpayer is allowed to skip monthly returns and can file only one return quarterly i.e. GSTR-4 by 18th of the month of quarter end. Also, he can file an annual return in GSTR-9A by December 31 of the next financial year

Benefits:

  • Grants relief to the MSME (that contribute 29% of the country’s economic output) on GST filing and tax rates

Drawbacks:

  • The scheme resists e-commerce players, businesses with tobacco and pan masala, inter-state supplies and ice-cream manufacturers to opt for the scheme
  • A buyer will not get the benefits of the input tax credit if he/she is transacting with a seller registered under the composite scheme

In News:

  • The finance ministry has extended the Last Date for availing the benefit of Alternate Composition Scheme from 30.04.2019 to 31.07.2019

Question: 

Q.1 For whom the Alternate composition scheme was launched under GST?
a. Farmers
b. Small taxpayers
c. Inter-state suppliers
d. Tobacco manufacturers

Q.2 which of the following is exempted from the benefits of alternate composition scheme?
a. Service providers of turnover up to Rs 50 lakh
b. Small taxpayers
c. E-commerce players
d. Traders of turnover up to Rs 1.5 crore
Last Date Extended for Alternate Composition Scheme Last Date Extended for Alternate Composition Scheme Reviewed by Neha on July 05, 2019 Rating: 5

No comments:

Join 8,000+ readers and get free notes in your email