Sunday 17 March 2019

Composition scheme for supplier of services with a tax rate of 6% : A big relief to Sevice Providers

The Central Government vide Notification No. 2/2019-Central Tax (Rate) dated 07thMarch, 2019 notified Composition scheme in case of intra-State supply of goods or services or both, at the rate along with the conditions specified below:

Description of supply
Rate (per cent)
First supplies of goods or services or both up to an aggregate turnover of Rs. 50 lakhs made on or after the 1st day of April in any financial year, by a registered person.
1. Supplies are made by a registered person, -
(i) whose aggregate turnover in the preceding financial year was Rs. 50 lakh or below;
(ii) who is not eligible to pay tax under sub-section (1) of section 10;
(iii) who is not engaged in making any supply which is not leviable to tax;
(iv) who is not engaged in making any inter-State outward supply;
(v) who is neither a casual taxable person nor a non-resident taxable person;
(vi) who is not engaged in making any supply through an electronic commerce operator who is required to collect tax at source under section 52; and
(vii) who is not engaged in making supplies of:
  1. Ice cream and other edible ice, whether or not containing cocoa.
  2. Pan masala
  3. Tobacco and manufactured tobacco substitutes

2. Where more than one registered persons are having same PAN, central tax on supplies by all such registered persons is paid at the given rate.

3. The registered person shall not collect any taxfrom the recipient nor shall he be entitled to any credit of input tax.

4. The registered person shall issue, instead of tax invoice, a bill of supply.

5. The registered person shall mention the following words at the top of the bill of supply, namely: -
Taxable person paying tax in terms of Notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’.

6. Liability to pay central tax at the rate of 3% on all outward supplies notwithstanding any other notification issued under section 9 or section 11 of said Act.

7. Liability to pay central tax on inward supplies on reverse charge under sub-section (3) or sub-section (4) of section 9 of said Act.

Explanation: For the purposes of this notification, the expression “first supplies of goods or services or both” shall, for the purposes of determining eligibility of a person to pay tax under this notification, include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the said Act but for the purpose of determination of tax payable under this notification shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act.
It may be noted that while computing aggregate turnover in order to determine eligibility of a registered person to pay central tax at the rate of 3%, value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account.

Click the link below to give your start rating and review. 

No comments:

Post a Comment

New Tax Regime or Old – What should you choose?

The budget 2020 saw the finance minister Nirmala Sitraman announce a new tax regime with more tax slabs and lower tax rates. This was long...