PANAJI: To provide relief to small bars and taverns whose annual business is less than Rs 10 lakh and who were recently brought under the Value Added Tax (VAT), govt has given such entities the option to opt for the ‘composition scheme’ and pay just 2% of their annual turnover as VAT.
The commissioner of state taxes has created a new category under the VAT composition scheme for small bars and taverns.”This is to provide some relief to the family-run bars and taverns in the village as they will no longer have to go through the hassle of the compliances. For the customer, the alcohol becomes a little cheaper,” said a senior official with the department.
Bars and taverns that serve alcohol to customers have to pay 22% on IMFL and 5% on country liquor and they would get input tax credit. In December, the department brought in an amendment making it compulsory for all bars and taverns, even small ones to register under the VAT regime. Irrespective of whether a bar collects tax from the customer, VAT has to be paid otherwise a penalty will be imposed. The penalty for the unregistered dealers which can go up to Rs 25,000.
The time limit given to bars and taverns to register for VAT has been extended to March 31, while the deadline to opt for the composition scheme is Mar 15.
“If they don’t want to go through this hassle of filing periodic returns, they can opt for composition. The composition scheme is easy as they don’t have to maintain details of all sales and they pay tax on their total annual turnover. This reduces their burden and they have to file returns only once a year through the one-page form,” said the officer.
Small taverns in the villages don’t usually collect tax.
Earlier there was no composition scheme for bars and it was only for liquor retailers who sell the packed bottles with no value addition who could opt to pay 1% of their annual turnover as composition tax as their turnover is Rs 1 crore. “There was only one category. Now, a second category has been created for small bars and taverns who purchase alcohol within Goa,” said the officer.
The commissioner of state taxes has created a new category under the VAT composition scheme for small bars and taverns.”This is to provide some relief to the family-run bars and taverns in the village as they will no longer have to go through the hassle of the compliances. For the customer, the alcohol becomes a little cheaper,” said a senior official with the department.
Bars and taverns that serve alcohol to customers have to pay 22% on IMFL and 5% on country liquor and they would get input tax credit. In December, the department brought in an amendment making it compulsory for all bars and taverns, even small ones to register under the VAT regime. Irrespective of whether a bar collects tax from the customer, VAT has to be paid otherwise a penalty will be imposed. The penalty for the unregistered dealers which can go up to Rs 25,000.
The time limit given to bars and taverns to register for VAT has been extended to March 31, while the deadline to opt for the composition scheme is Mar 15.
“If they don’t want to go through this hassle of filing periodic returns, they can opt for composition. The composition scheme is easy as they don’t have to maintain details of all sales and they pay tax on their total annual turnover. This reduces their burden and they have to file returns only once a year through the one-page form,” said the officer.
Small taverns in the villages don’t usually collect tax.
Earlier there was no composition scheme for bars and it was only for liquor retailers who sell the packed bottles with no value addition who could opt to pay 1% of their annual turnover as composition tax as their turnover is Rs 1 crore. “There was only one category. Now, a second category has been created for small bars and taverns who purchase alcohol within Goa,” said the officer.