Composition scheme in GST
This query is : Resolved
20 January 2021
Hi, My client is providing business consulting service as well as renting of immovable property services.
Can my client go for composition scheme under GST ? Can anybody please help me in this.
Can my client go for composition scheme under GST ? Can anybody please help me in this.
06 July 2024
No, your client cannot opt for the composition scheme under GST if they are providing both business consulting services and renting of immovable property services. Let me explain why:
1. **Composition Scheme Eligibility:**
- The composition scheme is available to specific categories of taxpayers, primarily those with a turnover threshold up to Rs. 1.5 crore (Rs. 75 lakh for special category states) who are engaged in the supply of goods.
- It is also available to restaurants (not serving alcohol) and specific service providers.
2. **Activities Covered:**
- The composition scheme is generally not available for service providers except for specific services like restaurant services (without alcohol) and certain notified services.
3. **Activities Excluded:**
- Business consulting services fall under the category of professional services, which are not eligible for the composition scheme.
- Renting of immovable property is also specifically excluded from the composition scheme.
4. **Ineligibility for Mixed Activities:**
- Since your client is engaged in both consulting services (a professional service) and renting of immovable property (a service explicitly excluded from composition), they cannot opt for the composition scheme.
5. **Compliance and Penalty Risk:**
- Opting for the composition scheme when not eligible can lead to penalties and interest liabilities under GST law.
- It's crucial to correctly assess eligibility before opting for the composition scheme to avoid these penalties.
Therefore, based on the nature of services provided by your client (business consulting and renting of immovable property), they are not eligible to opt for the composition scheme under GST. They would need to comply with regular GST provisions, including filing detailed returns and payment of tax on their services as per standard rates applicable.
1. **Composition Scheme Eligibility:**
- The composition scheme is available to specific categories of taxpayers, primarily those with a turnover threshold up to Rs. 1.5 crore (Rs. 75 lakh for special category states) who are engaged in the supply of goods.
- It is also available to restaurants (not serving alcohol) and specific service providers.
2. **Activities Covered:**
- The composition scheme is generally not available for service providers except for specific services like restaurant services (without alcohol) and certain notified services.
3. **Activities Excluded:**
- Business consulting services fall under the category of professional services, which are not eligible for the composition scheme.
- Renting of immovable property is also specifically excluded from the composition scheme.
4. **Ineligibility for Mixed Activities:**
- Since your client is engaged in both consulting services (a professional service) and renting of immovable property (a service explicitly excluded from composition), they cannot opt for the composition scheme.
5. **Compliance and Penalty Risk:**
- Opting for the composition scheme when not eligible can lead to penalties and interest liabilities under GST law.
- It's crucial to correctly assess eligibility before opting for the composition scheme to avoid these penalties.
Therefore, based on the nature of services provided by your client (business consulting and renting of immovable property), they are not eligible to opt for the composition scheme under GST. They would need to comply with regular GST provisions, including filing detailed returns and payment of tax on their services as per standard rates applicable.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN REDEVELOPED FLAT
- Requirement under FEMA &RBI
- CLOSING STOCK QUERY
- GST ISD Query on various AMCs
- Technical Glitch in ITR-4 Online Form (AY 2026-27): Sec 44AE Partner Remuneration not mapping to E8
- Residential status of non resident
- Short Term Gain Reporting ITR
- F&O reporting in ITR
- Itr processing refund
- Gst reverse charge mechanism to be claimed in the month of payment
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
- Query regarding reporting of exempt foreign remuneration in ITR (AY 2026-27)
- FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
- Goods return by customer
- INWARD REMITTANCE FOREIGN
- CPC and SAC
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
