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Composition scheme

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Bhargav Nirmal

96 Points Posted on 25 March 2020

composition supplier can do taxable & exempt supply ?

Replies (3)

Quick Summary

Composition scheme suppliers can indeed make both taxable and exempt supplies, with the key restriction being non-taxable supplies. They cannot collect output tax, hence issuing a 'Bill of Supply' instead of a 'Tax Invoice'. Furthermore, these dealers are ineligible for Input Tax Credit (ITC) and cannot engage in interstate supplies.

Deepak Kumar

453 Points Posted on 27 March 2020

No. composition supplier only issue bill of supply then bill of supply is not tax invoice there fore composition dealer not supply taxable goods

CA Naveen Chand

Chartered Accountant

8022 Points Posted on 27 March 2020

he is not eligible to do taxable supplies as he is required to issue "bill of supply" instead of "tax invoice" .

Important Note : even COMPOSITION DEALER IS NOT ELIGIBLE TO DO INTER STATE SUPPLIES

Shivam RC

Student

7666 Points Posted on 09 April 2020

Yes.....

Why not ???

A Composition Scheme dealer can do both Taxable as well as Exempt Supply. There is no such restrictions and conditions regarding the same in the CGST Act 2017 or the corresponding CGST Rules 2017. The restriction is only with the NON TAXABLE SUPPLY.

However, they are not allowed to collect Output Tax from their customers. That is why they have to issue a Bill of Supply instead of a Tax Invoice as per the Provision of Section 31(3) clause (c).

Further, they are not eligible to claim ITC on their inputs, as the same is restricted under Section 10(4) of the CGST Act 2017 and it is also specifically BLOCKED under Section 17(5) clause (e) of the CGST Act 2017.