Ice cream, pan masala and tobacco manufacturers cannot opt for GST composition scheme under which businesses are allowed to pay lower tax rate if their turnover does not exceed Rs 75 lakh. As per the notification issued by the Finance Ministry, manufacturer of ice cream, and other edible ice, whether or not containing cocoa, shall not be eligible to opt for composition levy under the Act.
Also makers of tobacco and manufactured tobacco substitutes will not be able to opt for the scheme. Under the composition scheme where the turnover does not exceed Rs 75 lakh, manufacturers will have to pay 1 per cent of turnover as GST, traders 2.5 per cent and 0.5 per cent of turnover in state in case of other suppliers. This turnover limit was hiked earlier this month by the GST Council from Rs 50 lakh.
However, the turnover limit for availing composition scheme in the eight north-eastern states and the hilly state of Himachal Pradesh will be Rs 50 lakh. Businesses with aggregate turnover of up to Rs 20 lakh (Rs 10 lakh in North-East and special category states) are exempt from GST. Businesses whose aggregate turnover in the preceding financial year is less than Rs 75 lakh can opt for a simplified ‘composition scheme’ wherein tax will be payable at a concessional rate on the turnover. Besides, the Finance Ministry has also notified 12 amendments to the Central Goods and Services Tax (CGST) Rules.