GoM SUGGESTS RATE CUT FOR MANUFACTURERS

New Delhi, Oct. 29: The ministerial panel working to make the GST composition scheme more attractive on Sunday suggested slashing tax rate to 1 per cent for manufacturers and restaurants, while easier norms for traders opting for it.

Currently, manufacturers and restaurants with turnover up to `1 crore pay GST under composition scheme at 2 per cent and 5 per cent respectively. The same for traders is 1 per cent.

In its second meeting, the Group of Ministers, headed by Assam finance minister Himanta Biswa Sarma, on Sunday also suggested doing away with the tax rate distinction between AC and nonAC restaurants, those which are not covered under composition scheme, and tax them at 12 per cent with input credit.

It also suggested that eating out at hotels, which has room tariff of more than `7,500, should attract an uniform 18 per cent tax rate instead of any separate category for 5-star hotel.

The GST Council is likely to take up the recommendations on November 10 in Guwahati .

With regard to traders, the GoM suggested two pronged approach for taxation under the composition scheme.

It suggested that traders who want to exclude the sale proceeds of tax-free items from its turnover, it can pay 1 per cent GST.

However, those traders who want to pay tax on total turnover, the rate has been proposed at 0.5 per cent.