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Myth: Purchasing from Composition Dealer attracts RCM u/s 9(4).

Truth: Composition is an option to pay lower tax for registered person having low turnover. But it doesn't mean that he is unregistered person in GST. So, No RCM u/s 9(4) applicable if purchase goods from composition dealer.

Myth: Composition dealer not purchase from Other State

Truth: As per Sec 10(2) it is clearly mentioned that Composition dealer not engaged in inter state outward supply. That means you can't sale goods or provide services out of state. But you can purchase goods or receive services from outside State.

So , Composition Dealer purchase from Outside State but can't sale outside State.

Myth: Two Separate invoice to be raised By dealer registered in normal scheme if both taxable & exempted supply is made.

Truth: Tax Invoice to be raised when taxable goods are supplied. If only exempted goods are supplied then you can issue bill of supply instead of tax invoice. But it doesn't means that two different invoices to be issued always when both exempted & taxable goods supplied to single person.

You can raise tax invoice in such situation mentioning nil amount of tax against exempt supplies.

So , No separate bill required to issue, only tax invoice is sufficient.

Myth: Goods supplied only to those dealer who are registered in GST or having GSTIN No.

Truth: This is only rumour by dealers. They just misinterpret  RCM. If you purchase from unregistered dealer then you have to pay tax on it under RCM, but while you sale it is of no effect that dealer is registered or not in GST.

Also GST provide exemption to certain persons from getting register in GST. So what's logic in getting them registered compulsory for GST

So , You can also sale goods to person not having GSTIN No.

Myth: In Composition Scheme, tax levied on taxable supplies only.

Truth: As per Sec 10(1) tax is levied on turnover if you opt for Composition Scheme & as per Sec 2(112) turnover includes both taxable & exempt supplies. That's the reason person dealing only in exempted goods keep out of Composition Scheme.

So, Composition Dealer have to pay tax on both taxable & exempt supplies at prescribed percentage.

Myth: HSN Code mandatorily required to be mentioned on Invoice.

Truth: For turnover below 1.5 crore there is no compulsion to show HSN code in invoice. For 1.5 crore to 5 crore  2 digits required. Above that 4 digits of HSN code to be shown in invoice. So, it is not compulsory to show HSN Code in Invoice.

Myth: Each & every Invoice to be scanned & uploaded in GST.

Truth: You have to fill GSTR-1 by filling details of invoice only in GST return. Even for exempted supplies & intrastate retail sales you are required to fill consolidated details. In interstate supply also, you are required to show invoice wise details of that invoice whose value exceeds Rs. 250000/-

So , No need to scan & upload Invoice. Only details are required to be filled in Returns.

Myth: There are many taxes imposed over sales in GST.

Truth: There are 3 types of taxes in GST i.e. SGST, CGST & IGST. If you supplied Outside State then IGST charged @ mentioned in Schedule. If supply made within State then SGST & CGST charged in equal proportion on taxable value.

So, not so many taxes levied in GST. Either IGST or SGST+CGST levied in GST.

Myth: Trader & dealer of Tobacco not eligible for Composition Scheme

Truth: As per Notification No. 8/2017 Manufacturer of Tobacco & its products, Pan Masala & Ice Cream are not eligible to opt Composition Scheme. However there is no restriction notified for traders & dealers. So, traders & dealers deal in Tobacco can opt for Composition Scheme.

Myth: All Invoice to generate online through Computer & need internet all time.

Truth: No need of internet all time. You have access to internet only at the time of filing return. Also bill issued manually. No need of computerized billing. So, no access required to computer & internet always.

Myth: All dealers have to file invoice wise details in return.

Truth: Only B2B taxable transactions are required to shown in GST returns. All other sale are to be shown on Consolidated basis. So, no need to show details of each & every invoice.

Myth: New GST rate is higher than VAT rate.

Truth: All other invisible taxes like excise,entry tax, CST get subsumed in  GST. So, it seems like rate is higher but actually its not.


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Category GST, Other Articles by - CA Rashmi Gandhi 



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