GST: only 100,000 SMEs opt for composition scheme

Composition scheme under gst
A scheme under the goods and services tax (GST) that provides easy compliance and a flat rate to small businesses has had a muted response so far.
The new indirect tax regime was rolled out on July 1. Till now, of the 8 million registrations on the GST Network (GSTN), only 0.1 million or 1.25 per cent have opted for the composition scheme.
The deadline for choosing this scheme is Friday. This is likely to be extended.
“The number (of registrations under the scheme) is quite small. I hope the deadline is extended, as more people would want to opt for it,” said Navin Kumar, chairman, GSTN.
The next opportunity to register for the scheme, if the deadline is not extended, would be next year. Kumar said he was yet to find out how many dealers were availing of the composition scheme under the value-added tax (VAT), but the number was surely more than 1 million.
Another government official, who did not want to be named, said the deadline was likely to be extended. “We might need to give more time for people to opt for the scheme.”
The GST Council had initially allowed entities with an annual turnover of Rs 50 lakh or less to register for the scheme, but increased the level last month. A dealer registered under the scheme would not be required to maintain detailed records like others.
The government official quoted above said the subdued response was because of the stringent conditions that accompany the scheme.
Only those dealing with goods can register for it; service providers except restaurateurs have been excluded. Those registered under it cannot avail of input tax credit nor issue a tax invoice. As a result, someone buying from a composition dealer will not be able to claim input tax on such goods.
Also, the reverse charge mechanism will not be covered under the scheme. These taxes will be liable to be paid.
Finance Minister Arun Jaitley and Revenue Secretary Hasmukh Adhia have been claiming that the composition scheme will benefit small businesses, but these entities do not seem to be convinced about it.
But, a composition dealer only needs to furnish one return, GSTR-4, on a quarterly basis and an annual return in FORM GSTR-9A, as against three forms on a monthly basis by others.
M S Mani of Deloitte said extending the deadline for registering under the composition scheme would be an excellent idea. “Dealers need time to work out their business model to match the compliance requirement of the composition scheme.”
He also said a person supplying from one state to another might need some time to strike an appropriate deal. Mani said the deadline could be extended by at least a month, and the scheme was a little too restrictive.
So far, 7 million taxpayers have migrated to the GSTN and there have been 900,000-1 million new registrations. In the last two days, 100,00 new registrations have been recorded.

Source  :

items of gst with rates

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