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GST Composition Scheme-Turnover Limit


GST Composition Scheme-Turnover Limit

GST Composition Scheme was designed to reduce the GST compliance burden for micro, small and medium enterprises (MSMEs). To enrol, the taxable person under GST must have an aggregate turnover of less than Rs.75 lakhs per financial year, in most cases. In this article, we look at the turnover limit for GST composition scheme in detail.

Turnover Limit Increased to Rs.75 Lakhs

The Ministry of Finance (MoF), Initially introduced the GST Composition Levy Scheme with a turnover limit of Rs.50 lakh. However, due to various representations, in the GST Council meeting held on 11th June 2017, the turnover limit for Composition Levy increased its limit from Rs.50 lakh to Rs.75 lakh for all eligible registered persons. Though the turnover limit was increased to Rs.75 lakhs for majority of the States, a few States as under have different turnover limits.

Further, the GST Council also recommended that in case of Uttarakhand, the turnover limit for Composition Levy for CGST and SGST purposes will be Rs.75 lakh.

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Turnover Limit of Rs.50 Lakhs for the Special Category States

The GST Council has decided that following special category states will have a Rs.50 lakhs turnover limit for Composition Levy for CGST and SGST purposes.

  1. Arunachal Pradesh
  2. Assam
  3. Manipur
  4. Meghalaya
  5. Mizoram
  6. Nagaland
  7. Sikkim
  8. Tripura
  9. Himachal Pradesh.

For the State of Jammu & Kashmir the turnover limit for the Composition levy has not yet been decided and will be decided in due course.

Manufacturers NOT Eligible for GST Composition Scheme

The following manufacturers will not be eligible for the Scheme:

  • Ice cream and other edible ice, whether or not containing cocoa
  • Pan masala
  • Tobacco and manufactured tobacco substitutes

Rate of Tax under GST Composition Scheme

The GST rate of tax for those registered under the Scheme is as follows:

  • Manufacturers, other than manufacturers of such goods as may be notified by the Government – 1%
  • Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II – 2.5%
  • Any other supplier eligible for composition levy under section 10 and these rules – 0.5%

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