New Change in Tax Rates for Composition Taxpayers
The Ministry of Finance has issued the first notification for the year 2018 by reducing the tax rates for the composition taxpayers vide Notification No. 1/2018- Central Tax dated 1st Jan 2018. Similar Notification also been issued under UTGST Act 2017 vide Notification No. 01/2018-Union Territory Tax,dt. 01-01-2018. The tax rates change for the composition taxpayers is applicable for manufacturers and traders.
The above notification is a welcome move to the composition taxpayers as the tax burden for the manufacturer is being reduced from 2% to 1% which makes the Micro and Small manufactures to supply to the manufactures as they can easily absorb the cost and the buyer can also have inward supplies from them thereby supporting the ecosystems and giving a flip to the Make in India policy.
In case of traders, who are dealing in both taxable and non-taxable supplies, was paying GST thereby defeating the whole concept of non-taxable supplies as the wording used is “supplies” now this is fixed with the usage of the wordings “taxable supplies”.
The effective date of the rate changes is from 1st of July 2018.