GST advisory group in favour of expanding composition scheme
The advisory group set up to suggest changes to the GST Act on Wednesday deliberated on how to expand the scope of the composition scheme as well as rationalise the reverse charge mechanism process.
This was the first meeting of the advisory group after it was formed earlier this week to suggest changes to the GST laws to make it more simple for taxpayers.
Industry sources said the deliberations today were on issues like doing away with Section 9(4) of CGST Act which deals with reverse charge mechanism. The section deals with payment of tax by registered dealers in cases where he procures goods from unregistered businesses.
Also, the group felt that manufacturers engaged in job works be allowed to opt for composition scheme. The scheme offers easier compliance for businesses, with traders, manufacturers and restaurants being allowed to pay tax at 1, 2 and 5 per cent, respectively.
Composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs 1 crore. This threshold was earlier Rs 75 lakh. The GST Council last month raised it to Rs 1 crore from October 1.
The advisory group, sources said, would finalise its report by end November so that the Goods and Services Tax (GST) Council can consider it in its meeting in December.
Effort is to make the report ready so that any changes in in the GST laws could be introduced in the Budget session of Parliament.
The advisory group would also look into the issue of exporters’ refund as well as laws relating to input tax credit.
The group has decided to look into the provisions of GST law for now. Changes in rules would be proposed later because those can be carried out any time and do not need Parliament’s nod, sources said.
CAIT Secretary General Praveen Khandelwal, Araghya Sen Gupta (Research Director, Centre for Legal Policy), Vinod Jain (CA), Ajay Sahai (DG and CEO of Federation of Indian Exporters Organisation) and Laghu Udyog Bharti President Om Prakash Mittal are members of the advisory group.
Retired Chief Commissioner of Central Board of Direct Taxes Gautam Ray has been named the Convenor.
Source- Business Standard.