New Delhi, Jul 31 (IANS): Union Revenue Secretary Hasmukh Adhia on Monday said as many as 5.12 lakh businesses have so far opted for the Composition Scheme under the GST system.

"Dealers opting for composition in the Goods and Services Tax (GST) system is 5.12 lakh up to Sunday (July 30)," the Revenue Secretary said in a tweet.

The last date for filing of intimation for composition levy is August 16. The aggregate turnover of a business has to be below Rs 75 lakh annually to be eligible.

Adhia dubbed as "untrue" some reports that only one lakh businesses had opted for the Composition Scheme.

Manufacturers of ice cream, pan masala, tobacco products/susbtitutes and service providers, except restauranteurs, are not eligible to avail of the Composition Scheme.

Under the scheme, traders, manufacturers, and owners of restaurants need to pay one, two, and five per cent tax respectively.

However, the Composition Scheme availability to a person shall lapse with effect from the date his business turnover reaches the Rs 75 lakh threshold.

The traders under the Composition Scheme would not be entitled to input tax credit.

But if a person registers as a normal taxpayer and his turnover remains below Rs 75 lakh per annum, he cannot switch to the Composition Scheme in the middle of the year and can opt for it only in the next financial year.

Moreover, a trader will have to mention that he is a "composition taxable person" on notice or signboard displayed at a prominent place at his business premises.

Also, on the bill of supply, the trader needs to mention that he is a "composition taxable person, not eligible to collect tax on supplies".