Within a week of being set up, the group of ministers (GoM) on making the GST composition scheme more attractive held its first meeting yesterday. The 5-member GoM, under Assam Finance Minister Himanta Biswa Sarma, has also been tasked to revisit Goods and Services Tax (GST) rates for restaurants.
With only over 15.50 lakh businesses out of 98 lakh registered under the GST regime opting for the composition scheme, the GST Council decided to set up the GoM to examine ways of making it more attractive.
Businesses with turnover of up to Rs 1 crore can opt for the composition scheme and they can pay taxes in the range of 1-5% and file returns quarterly. The GST Council, chaired by Finance Minister Arun Jaitley and consisting of his state counterparts, had on October 7 constituted the GoM, which will submit its report by the end of November.
The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal.
The GoM has also been tasked with revisiting the tax structure of different categories of restaurants with a view to rationalising or reducing the rates. Currently, GST is levied at 12% on non-AC restaurants while it is 18% for air-conditioned ones.
The GoM will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they are not, whether they should be disallowed input tax credit claims.