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Composition scheme

27 October 2019

Registered taxable person is providing taxable goods and service which is fall under 9(3) and 9 (4),then said person is eligible for composition scheme?

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8 Replies

sabyasachi mukherjee (26057 Points)
Replied 27 October 2019

COMPOSITION SCHEME IS APPLICABLE FOR THE FOLLOWING NATURE OF PERSONS:
THE SCHEME IS AVAILABLE TO THOSE WHOSE AGGREGATE TURNOVER OF SUPPLY OF GOODS IN A FINANCIAL YEAR DOD NOT EXCEED RS.100 LAKS THE LINIT IS EXTENDED TO 1
.5 CRORES FROM 1.4.2019.
IN CASE OF UTTARKHAND THE LIMIT IS EXTENDED UPTO 75 LAKS.
RATES U DER COMPOSITIO N SCHEME :
TAX PAYABLE BY MANUFACT.
0.5% CGST AND SAME RATE SGST
IN CASE OF MANUFACT URER OF FOODS 5% TO RESTAURANT.

UNDER COMPOSITION SCHEME THEY DO NOT HV TO RAISE ANY INVOICE.
TURNOVER IS APPLICABLE IS NET TURNOVER EXCLUSIVE OF TAXES.

1 Like

RAJA P M ("Do the Right Thing...!!!") (127167 Points)
Replied 28 October 2019

No... He is not eligible for composition scheme...

Kapadia Pravin (17249 Points)
Replied 29 October 2019

A Composition Dealer has to pay tax under Reverse Charge Mechanism wherever applicable.

The rate applicable to the supplies is the rate at which GST has to be paid. This means that rate under composition scheme should not be used for reverse charge purposes.

Also, no ITC is available for tax paid under reverse charge for a composition dealer.

Though you may opt for composition (if otherwise eligible) yet not advisable in view of many disadvantages.

I think 9(4) is yet to be notified.
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A Composition Dealer has to issue Bill of Supply. They cannot issue a tax invoice.

This is because the tax has to be paid by the dealer out of pocket. A Composition Dealer is not allowed to recover the GST from the customers.
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sabyasachi mukherjee (26057 Points)
Replied 29 October 2019

THERE ARE MANY OTHER PROVISIONS
APPLICABLE FOR COMPOSOTION
SCHEME.
OBVIOUSLY HE CANNOT CLAIM INPUT CREDIT .
THAT GOES WITHOUT SAYING....

Pravin Kapadia (8 Points)
Replied 29 October 2019

Originally posted by : sabyasachi mukherjee
	THERE ARE MANY OTHER PROVISIONS APPLICABLE FOR COMPOSOTION SCHEME.OBVIOUSLY HE CANNOT CLAIM INPUT CREDIT .THAT GOES WITHOUT SAYING....

Torturous for forum users . Both replies

Can anyone tell what reply for the query is ?

sabyasachi mukherjee (26057 Points)
Replied 01 November 2019

@ zaid ( your query is vague) Sec
if u can refer the section you should know that sec 9(3) deals with RCM on certain class of dealers.
Sec 10 deals with composition scheme.
So I have explained composition scheme.

Please respond if I am wrong.
sec 9(3) deals with different things altogether.