Composition scheme, Supply through GeM, Gst at source

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A composition dealer supplying goods through GeM to a government department had their composition status rejected. The GST officer cited that supplying via an e-commerce operator like GeM makes the composition scheme ineligible. Consequently, the supply was treated as regular, attracting a demand notice for full GST.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)
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26 May 2025 One of my client, being a composition dealer, supply goods through GeM to Govt.deptt. Govt. has deducted GST at source on one of his supply bill. On the basis of GST at source and on GeM supply, local GST officer has rejected my client's composition nature of supply, termed it is regular supply and issued a demand notice against the same. What should I do sir ?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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12 August 2025 Composition Scheme Eligibility:

Composition scheme is available only if the dealer does not supply goods or services through e-commerce operators.

As per Section 10(2)(b) of CGST Act, if supply is made through an e-commerce operator, composition scheme is not applicable.

GeM as an E-Commerce Operator:

GeM is notified as an e-commerce operator under GST laws.

Supply of goods through GeM falls under supplies through an e-commerce operator.

GST at Source (TDS under Section 51):

Government departments deduct GST at source on payments made to suppliers through GeM.

Impact on Composition Scheme:

Because your client supplies through GeM, the supplier is not eligible to opt for the composition scheme for such supplies.

The local GST officer's demand notice is based on this premise and treats the supply as regular supply liable to full GST.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)
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12 August 2025 Many many thanks for clarifications.

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