SIXER” in GST, its New!!! (6% GST Rate)

Arjuna (Fictional Character): Krishna, as IPL season is going on and batsmen are hitting sixers and making records in the matches, likewise the new rate of 6% has been introduced in GST, it’s a sixer in GST. Please tell something about that sixer.

Krishna (Fictional Character): Arjuna, Cricket and GST, what a co-relation. Let’s play it. Government has issued notification on 7^th March, 2019 in relation to eligibility/availability of composition scheme for the suppliers of goods or services or both, which was earlier not available.  This notification was a result of the major decisions taken by the council to reduce the burden on the small taxpayers. By allowing the suppliers of goods or services or both to opt this scheme, government has reduced the compliance burden on the taxpayers. This will be beneficial for the players of GST like small service providers like CA, Architect, Engineer, Commission and Brokerage, Consultancy services, Works contractor, etc. It’s small format of taxation like 20:20 cricket. New game of GST is now going to start from 1-4-2019, where for first 20 lakhs aggregate turnover no tax and then for next 30 there is 6% tax rate scheme. Thus, its 20:30 scheme in GST.

 Arjuna: Krishna, How to play in this scheme of GST?

Krishna:  Arjuna, The scheme provides that the registered person under GST, supplying goods or services or both up to an aggregate turnover of INR 50 Lakhs can pay tax @6% (CGST- 3% & SGST- 3%).

For example: A is a service provider. The turnover in F.Y. 18-19 is 25 lakhs. He can opt for Service composition scheme from 1^st April, 2019.

Therefore, it depends on how many runs (turnover) the player has scored in previous match (Previous year). If he scored below half century i.e, 50  runs (Lakhs), then only he can opt for the scheme.

Arjuna: Krishna, are there any conditions to be complied, if one wants to Play in this scheme?

Krishna: Arjuna, like in cricket, the following are the conditions to play in this scheme in GST:-

• Aggregate turnover of the supplier should be INR 50 Lakhs or less in the preceding financial year.
• The supplier should not be eligible to pay tax under section 10 (1) of the Act (Composition Scheme)
• The supplier should not be engaged in making supply, which is not leviable to tax.
• The supplier should not be engaged in making any inter-state supply.
• The supplier should not be a casual taxable person.
• The supplier should not be a non-resident taxable person.
• The supplier should not be engaged in making supplies through an e-commerce operator who is required to collect tax u/s 52.
• The supplier should not be engaged in making supplies of following

Ice cream and other edible ice whether or not containing cocoa (HSN 21050000), Pan masala (21069020) and all goods i.e. tobacco and manufactured tobacco substitutes (24).

Thus under new scheme, like cricket lots of restrictions are there like power play, No balls, limited players in yards, limited bowling, etc. Thus a tax payer who opts for this Sixer Scheme should play carefully otherwise the third umpire’s (GST officer/ GSTN) decision will be final.

Arjuna: Krishna, are there any other conditions to Play?

Krishna:  Arjuna, The other Conditions are like Cricket rules of Players mode code of conduct-

1. The scheme shall apply to all the GST registrations taken under the same PAN.

The supplier cannot collect any tax from the recipient of supplies.

The supplier cannot avail input tax credit.

The supplier, instead of a tax invoice, is required to issue a bill of supply. The supplier is also required to mention ‘taxable person paying tax in terms of notification no. 02/2019- Central Tax (Rate) dated 7th March, 2019, not eligible to collect tax on supplies’.

The supplier would be liable to pay tax under reverse charge basis if any, on inward supplies at applicable rates.

And all other conditions, restrictions, rules as applicable to other players of composition Tax payers under section 10 are applicable to this new scheme also i.e for example: Putting a name plate of composition dealer, filling GSTR-4, etc.

Arjuna: Who can play in the new scheme?

Krishna: Like in cricket, net practice, training and fitness test of players is taken before admission likewise in GST, A registered person who wants to play for the new scheme shall file the FORM GST CMP-02 by 30^th April 2019 and such person shall also file the FORM GST ITC-03 for ITC reversal.

The person who wants to apply for new registration under this scheme, shall file the FORM GST REG-01, para 5 & 6.1 (iii).

Arjuna: Krishna, what one should learn from this GST and Cricket?

Krishna: Arjuna, New scheme of GST is a good scheme to hit SIXER, as upto turnover of 20 lakhs, no need to pay tax on services and the person having turnover upto 50 lakhs can play for composition scheme, which will be helpful to small taxpayers. However, one needs to be master of rules and playing technique of Cricket, like wise one must read and comply all conditions of GST, otherwise he may get Caught OUT by Authorities.