On a regular basis, we all use to find stores and shops in our area, which use plain paper to issue bills instead of or to issue a proper invoice. You will not find any account books or detailed records regarding their sales, purchases and stocks.
But this does not mean that they are exempted from taxes. They have chosen drafting schemes by means of which they pay a certain amount instead of tax and are a tax supplement.
Special types of taxpayers are always difficult to fully comply with the requirement of compliance with the laws of the ax because of their small size or size of their business. Let you be one of them. Also, the cost of tax reimbursement from these types of taxpayers is significantly more in percentage than the tax recovered from them. But this does not mean that they do not need to pay tax.
Although to meet this dual goal of simplicity, tax collectors and taxpayers have specific taxpayer schemes that allow taxpayers to pay their taxes based on calculations for a certain parameter instead of tax calculated on the basis of a complex calculation that is expected by law.
You will find the same thing in section 8 of the GST model law.
What is the composition of Levi
[Notwithstanding anything to the contradiction contained in the Act but subject to sub section (3) of section 7, on the recommendation of the Council, the proper officer of the Central or a State Government may, subject to such conditions and restrictions as may be prescribed, permit a registered taxable person, which aggregate turnover in a financial year does not exceed [fifty lakh of rupee], to pay. instead of tax payable to them. the amount calculated at a rate that can be prescribed, but not less than one percent of the turnover during the year.
source: - gstindia.com]
Scheme in accordance with the Model Law
Cumulative annual turnover of Rs. 50 lakhs are proposed to apply to a taxable person.
The amount must be at least 1% of the turnover during the year.
Services or supplies provided in interstate mode will not be eligible.
The tax will not be levied by such an authorized person for the goods provided to them.
Any input tax credit will not be eligible for any claims.
- Full analysis of the features of the scheme. Section 2 (6) contains a complete definition of the cumulative turnover, which means the cumulative sum of all taxable and non-taxable goods, exempted deliveries and exports of goods and services of a person representing the same permanent account number.
- Instead of a tax on goods and services, at least 1% of the turnover will be paid.
- It is not yet clear whether the amount will be calculated for total turnover or taxable turnover.
- The taxpayer will not charge tax on the items produced by him. Suppose he does not have to levy tax on the supplies he made, so imagine that he issued sales invoices or keeps track of turnover - this is a wrong thinking.
- Entering a tax credit can not qualify the taxpayer.
Conclusion
- Tax on services and state laws Vat as of the date have the existence of schemes of drawing up. Different providers will conduct different types of Schemes. Therefore, the schemes need to be developed, given the nature of the business in mind compared to the size of the business.
- The value of consumables in terms of the “Supplier of Goods”, the amount of the collection fee should be corrected, since the expectation that these suppliers will keep records of their turnover will be impossible.
- The percentage of taxable turnover will determine the amount of the fee, not the percentage of total turnover, otherwise it will be very unfair to suppliers who are not taxed and are exempt from circulation.
