Ice cream, tobacco, pan masala to be excluded from higher threshold limit

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Entities engaged in businesses of ice cream, pan masala and tobacco will not be eligible for the proposed higher threshold limit for mandatory registration and new composition scheme for services under the Goods and Services Tax (GST). The new proposals will come into effect from April 1.

Under the new mechanism, threshold for goods suppliers in 20 States and the one Union Territory (with Assembly), i.e. Delhi, for mandatory registration will be 40 lakh, against the present 20 lakh. Similarly for the seven North-Eastern States (barring Assam) and the hilly State of Uttarakhand, threshold for mandatory registration will be 20 lakh as against 10 lakh as of now. Telangana and the Union Territory of Puducherry will continue to have threshold of 20 lakh.

Composition Scheme

It has also been decided to introduce a new Composition Scheme for services. Businesses (both services alone and mix, that is goods and services supplier) with annual turnover up to 50 lakh will be eligible for the new scheme. According to the draft notifications, businesses of three categories of goods and their supply have been excluded.

The first category is ice cream and other ice, whether or not containing cocoa, while the second category is of pan masala and the third category comprises tobacco and manufactured tobacco substitutes. While ice cream attracts GST at the rate of 18 per cent, tobacco and pan masala attract GST at the rate of 28 per cent. There is also a cess on tobacco.

Read more at: https://www.thehindubusinessline.com/news/gst-ice-cream-tobacco-pan-masala-to-be-excluded-from-higher-threshold-limit/article26343645.ece

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