Composition dealer

can composition dealer collect gst from customers on supply
Replies (3)
As per my Knowledge Composition Dealers are not Authorized to Collect TAX on Supply.

Never......... That's the first condition of composition dealer under GST....

Straight forward answer is NO.

There are certain rules, eligibility criteria or conditions to apply for composition scheme under GST.   These are the conditions a composition dealer must know before applying for Composition scheme.

  • The aggregate turnover in the preceding financial year must be fifty lakh rupees or below for other type of services.   However, 1.5 crore turnover scheme is also available for supply of goods and restaurant services only.
  • The person shall pay tax under the reverse charge mechanism, if he purchases goods or services under subsection 3 and 4 of section 9.
  • He should not be engaged in making any supply which is not leviable to tax under the said Act.
  • Must not be engaged in making any inter-State outward supply.
  • A person is neither a casual taxable person nor a non-resident taxable person.
  • Not engaged in making any supply through an electronic commerce operator.
  • Not making supplies of goods viz:
    • Ice cream and other edible ice, whether or not containing cocoa. (chapter 21050000)
    • Pan masala (Chapter 21069020)
    • All goods, i.e. Tobacco and manufactured tobacco substitutes(Chapter 24)
  • Not eligible to take the input tax credit
  • Shall not collect tax from the recipient of goods or services.
  • He needs to issue a bill of supply instead of tax invoice
  • He shall mention the following words at the top of the bill of supply: “Taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’.

Also, here are other restrictions

Restrictions for Goods

The supplier of below items is not eligible to avail composition scheme. This has reference to CGST Notification no. 14/2019–Central Tax dt.07.03.09 and No.43/2019-Central Tax dt.30.09.2019.

HS CODE Descripttion
2105 00 00 Ice cream and other edible ice, whether or not containing cocoa.
2106 90 20 Pan masala.
24 All goods, i.e. Tobacco and manufactured tobacco substitutes
2202 10 10 Aerated Water

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