Limit on Composition Tax Rate

As per discussions in the 16th GST Council Meeting held on 11th June, 2017, The Indian
Government Revised Threshold Limit for Composition Levy.

1. Sub section (1) of section 10 read with sub-section (2) of the same section of the CGST
   Act-2017 provides that an eligible registered person, whose aggregate turnover in the
   preceding financial year did not exceed Rs.50 lakh, may opt to pay, in lieu of the tax
   payable by him, an amount calculated per below table:

   
   

   S.No.	Category of registered persons	Rate of tax
   1	Manufacturers, other than manufacturers of such goods as may be notified by the Government	1%
   2	Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II to the CGST Act; and	2.5%
   3	Any other supplier eligible for composition levy under section 10 and these rules (turnover in State or turnover in Union Territory)	½%

2. The said sub-section also provides that the said limit may be increased upto Rs.1  crore
   (One Crore) on the recommendations of the discussions in the 16th GST Council Meeting held on 11th June, 2017.
3. The GST Council, as per discussions in the 16th GST Council Meeting held on 11th
   June, 2017, has recommended increase in the aforesaid turnover limit for
   Composition Levy for Central Goods and Service Tax (CGST) and State Goods and
   Service Tax (SGST) purposes from Rs.50 lakh to Rs.75 lakh in respect of all eligible
   registered persons, referred to in the aforesaid subsection.

 However, whether the same increased turnover limit for Composition levy will apply in case
of Special Category States or not will be decided in the next Goods and Service Tax (GST)
 Council meeting.

 Please click here to draft formats on Composition Levy under GST Act/Rule