Composition scheme
This query is : Resolved
Sneha Sharma
(Querist)
25 July 2019
sir,
i have a query regarding a matter under GST.
one of the dealer presently engaged in health care (hospital) services having turnover of Rs.300.00 lakhs during last financial year which is presently exempted under GST. Now the dealer wants to start a new medicine shop for which he has to take GST registration.
The question is:-
1) can he opt for Composition Scheme under GST as his turnover from sale of medicine will be less than Rs. 150.00 lakh and he is fulfilling all other conditions for Composition Scheme. However considering his exempted sales of Rs.300 lakh turnover will be more than Rs. 150 lakh presently stipulated for Composition scheme.
2) whether he has to pay Composition tax of 1% on his existing Exempted sales?
3) what will be his liability under Reverse charge mechanism if beimg allowed under composition scheme?
4) what will be his liability under Reverse Charge Mechanism if being allowed under Composition Scheme?
Your valuable suggestion in this matter shall be highly appreciated.
i have a query regarding a matter under GST.
one of the dealer presently engaged in health care (hospital) services having turnover of Rs.300.00 lakhs during last financial year which is presently exempted under GST. Now the dealer wants to start a new medicine shop for which he has to take GST registration.
The question is:-
1) can he opt for Composition Scheme under GST as his turnover from sale of medicine will be less than Rs. 150.00 lakh and he is fulfilling all other conditions for Composition Scheme. However considering his exempted sales of Rs.300 lakh turnover will be more than Rs. 150 lakh presently stipulated for Composition scheme.
2) whether he has to pay Composition tax of 1% on his existing Exempted sales?
3) what will be his liability under Reverse charge mechanism if beimg allowed under composition scheme?
4) what will be his liability under Reverse Charge Mechanism if being allowed under Composition Scheme?
Your valuable suggestion in this matter shall be highly appreciated.
CMA ALKESH PATEL
(Expert)
26 July 2019
As per Section 10(1) of CGST Act, 2017 A registered person whose aggregate turnover in the previous financial year did not exceed 1.5 crore (As amended by the Notification Notification No. 14/2019 – Central Tax New Delhi, the 7th March, 2019.) The limits for special category states [(i) Arunachal Pradesh (ii) Uttarakhand (iii) Manipur (iv) Meghalaya (v) Mizoram (vi) Nagaland (vii) Sikkim (viii) Tripura] remains 75 lakhs.
As per section 2(6) of CGST Act 2017, “Aggregate Turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable on reverse charge basis), exempt supplies, export of goods or services or both and interstate supplies of persons having the same PAN to be computed on all India basis but excludes (CGST, SGST, UTT, IGST, CESS).
It has been clarified vide order No. 01/2017 date 13 October 2017 that for computing the aggregate turnover for eligibility for the scheme, the turnover of exempted services, including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, supplied by a taxpayer will not be included.
SO YOU HAVE OPTION FOR COMPOSITION SCHEME
YOUR LIABILITY UNDER RCM AS A NORMAL RATE OF TAX AND YOU CAN NOT TAKE ITC ON IT.
As per section 2(6) of CGST Act 2017, “Aggregate Turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable on reverse charge basis), exempt supplies, export of goods or services or both and interstate supplies of persons having the same PAN to be computed on all India basis but excludes (CGST, SGST, UTT, IGST, CESS).
It has been clarified vide order No. 01/2017 date 13 October 2017 that for computing the aggregate turnover for eligibility for the scheme, the turnover of exempted services, including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, supplied by a taxpayer will not be included.
SO YOU HAVE OPTION FOR COMPOSITION SCHEME
YOUR LIABILITY UNDER RCM AS A NORMAL RATE OF TAX AND YOU CAN NOT TAKE ITC ON IT.
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