Notification No. 01/2018 - Union Territory Tax Explained

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Notification No. 01/2018 - Union Territory Tax: Union Territory Tax seeks to further amend notification No. 2/2017 - Union Territory Tax so as to prescribe effective rate of tax under composition scheme for manufacturers and other suppliers.

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II, SECTION 3, SUB-SECTION (i)]

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.2/2017- Union Territory Tax, dated the 27^th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i), vide number G.S.R. 648 (E), dated the 27^th June, 2017, namely:-

In the said notification, in the opening paragraph, -

in clause (i), for the words “one per cent.”, the words “half per cent.” shall be substituted;

in clause (iii), for the words “half per cent. of the turnover”, the words “half per cent. of the turnover of taxable supplies of goods” shall be substituted.

(Ruchi Bisht)
Under Secretary to
Government of India

Note: - The principal notification No.2/2017- Union Territory Tax, dated the 27^th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 648(E), dated the 27^th June, 2017 and last amended by Notification No. 16/2017- Union Territory Tax, dated 13^th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number GSR 1292 (E), dated the 13^th October, 2017.

📚 Frequently Asked Questions (FAQs): Notification No. 01/2018 – Union Territory Tax

Q1: What is Notification No. 01/2018 - Union Territory Tax?

Answer:
It reduces composition tax rate for manufacturers from 1% to 0.5% and clarifies turnover calculation. 1

Q2: From when is it effective?

Answer:
From 1 January 2018. 1

Q3: What rate applies to manufacturers?

Answer:
0.5% of turnover. 1

Q4: What was the earlier rate?

Answer:
1% before amendment.

Q5: On what turnover is 0.5% applied for traders?

Answer:
On turnover of taxable supplies of goods. 1

Q6: Does this apply to service providers?

Answer:
Primarily applicable to goods suppliers and manufacturers under Section 10.

Q7: Can composition dealer collect GST from customers?

Answer:
No. They cannot collect tax separately.

Q8: Can composition dealer claim ITC?

Answer:
No, Input Tax Credit not allowed.

Q9: Is inter-state supply allowed?

Answer:
Generally no (subject to later amendments).

Q10: Does this apply in all Union Territories?

Answer:
Yes, in UTs governed by UTGST Act.

Q11: Is quarterly return required?

Answer:
Composition dealers file simplified returns as prescribed.

Q12: What happens if turnover exceeds limit?

Answer:
Taxpayer must shift to regular scheme.

Q13: Does this reduce compliance burden?

Answer:
Yes, significantly.

Q14: Should small manufacturers opt for composition?

Answer:
Depends on turnover, customer profile, and ITC needs.
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Answer:
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