SMEs will benefit from composition scheme, says CBEC chief

New Delhi, June 12 (IANS) Central Board of Excise and Customs (CBEC) Chairperson Vanaja Sarna has said that small and medium enterprises engaged in trade, manufacturing and restaurants business will benefit under the new limit of the Composition Scheme for the GST.

"Everybody will get the benefit, those who are already listed in the services or the traders or manufacturers among services... without any change in the rate that is already listed in the section," Sarna told BTVi in an interview.

On Sunday, the GST Council decided to allow traders, manufacturers and restaurants with turnover of up to Rs 75 lakh to avail the composition scheme. The bar was earlier set at Rs 50 lakh.

Under the scheme, traders with turnover of up to Rs 75 lakh will be required to pay one per cent tax, while manufacturers will have to pay two per cent and companies engaged in restaurant business five per cent.

"Initially it was up to Rs 50 lakh. The Section 10 of the Act provides it to be increased up to Rs 1 crore. There was a discussion about the difficulties of the small and medium sector and because the central excise assessees were actually exempt below Rs one and a half crore, so it was felt it could be a hardship to them," Sarna elaborated.

"So the council deliberated a lot on this and finally came to a conclusion that it would be appropriate to make it Rs 75 lakh instead of Rs 50 lakh and that may cover the concern of the small and medium sector."

However, the business which avail the scheme will not be eligible for input tax credit.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)