Rule 32(5) for Composition dealer

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This query is : Resolved

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A composition dealer selling second-hand mobile phones cannot use Rule 32(5) margin scheme and must pay GST on total turnover. Under the regular GST scheme, ITC is available on new mobile phone purchases, and margin scheme valuation under Rule 32(5) can be applied to eligible second-hand mobile transactions.

Javed Memon

Javed Memon (Querist)

09 May 2026 Whether a composition dealer dealing in second-hand goods ( Mobile )can opt for valuation under Rule 32(5) and pay composition tax on the margin amount instead of total turnover?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

10 May 2026 A composition dealer cannot opt for the Margin Scheme under Rule 32(5). Under the Composition Scheme, GST must be paid on the total turnover (the full selling price), not just the margin. To use the margin-based valuation, the dealer would need to convert to a Regular Taxpayer status.

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Javed Memon

Javed Memon (Querist)

13 May 2026 If a person is dealing in both new mobile phones and second-hand mobile phones, and opts for the Regular GST Scheme:
Can the dealer avail ITC on purchase of new mobile phones?
For second-hand mobile phones, can the dealer opt for valuation under Rule 32(5) (margin scheme)?

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