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Composition accounting clarification

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Divyashree kn

24 Points Posted on 22 January 2022

my client is actually a regular tax payer, but now purchasing from composition dealer,who is collecting gst by providing tax invoice which is not allowed, so can any one tell me how to consider that composition invoices, either as regular purchase with itc or by way of unregistered purchase of invoice value?

Replies (3)

Quick Summary

This discussion addresses how a regular taxpayer should account for purchases from a composition dealer who has incorrectly issued a tax invoice. The consensus is to treat these purchases as unregistered purchases at the invoice value. Crucially, the GST amount paid to the composition dealer should not be paid, as Input Tax Credit (ITC) cannot be claimed on such transactions.