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Composition Scheme

mvramana (Student) (285 Points)

07 April 2020

A hotel supplying food tied up with swiggy/zomoto (e-commerce operator) apart from its regular business.

Whether the hotel call opt composition scheme under GST?

Please clarify

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11 Replies

Shivam RC (Student) (23683 Points)
Replied 08 April 2020

No, he is not eligible to opt for Composition Scheme.

As per Restrictions & Conditions laid down in the Provision of Section 10(2) of the CGST Act 2017 read with Rule 5 of the CGST Rules 2017, A person who supplies his goods/services through an e-commerce operator cannot opt to pay tax under the Provision of Section 10 i.e. Composition Scheme.

2 Like

mvramana (Student) (285 Points)
Replied 08 April 2020

Composite Dealer as per Sec.10(2)(d) is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52.
Sec.52 applies only where the consideration is collectec by the e-commerce operator.

In the above case, assume that swiggy/zomoto is not collecting the consideration and the hotel is only taking the consideration amount and paying the commission amount to the operator.

In this scenario, can the hotel continue u/s 10?

Thank you

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 08 April 2020

Yes you are correct .
The composit dealer cannot supply through the e-commerce who are collecting TCS & If Zomoto/swiggy are not collecting TCS then you can supply through them .

1 Like

Rajkumar Patel (602 Points)
Replied 08 April 2020

110% You can opt composition scheme because section 10(2)(b) restrict to only supply of goods through e-commers and not to services providers

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 08 April 2020

if a composition dealer make any supply through e-commerce operator (in your case swiggy etc) then such person is not eligible for composition scheme .

1 Like

RAJA P M ("Do the Right Thing...!!!") (127040 Points)
Replied 08 April 2020

Yes.... I agreed to Mr Shivam RC, Mr Pankaj Rawat Ji and Mr Naveen chand reply...

If A GST Taxpayer supply his goods through E-commerce then he is not eligible to Composition Scheme...

Rajkumar Patel (602 Points)
Replied 08 April 2020

Supply of food by hotel or restaurant is considered as supply os services under schedule 2

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 08 April 2020

I fully agree with Mr. Rajkumar Patel.
He cannot supply Goods on behalf of E-commerce but the Restaurant services falls under Supply of services but subject to conditions that he not registered as Composition dealer under NN 2/2019 CT(R)

So in Short if he his registered under composit scheme under Section 10(1) can supply on behalf of Swiggy but subject to condition that such E-commerce is not collecting TCS.

1 Like

mvramana (Student) (285 Points)
Replied 08 April 2020

Sec.10(2)(d) talks about only goods whereas supply of food as service under Sch 2 Para 6(b).

Further Sec.52 will play only where consideration is collected by e-commerce operator and he is supposed to do TCS.

However, as per Budget 2020, the term ".......supply of goods or services or both" was inserted in place of "..... supply of goods" in sec.10(2).

Thank you all for sharing your views 🙏

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 10 April 2020

In addition to above : E-commerce operator can deduct TCS only :
when Bill is not raised by E-commerce to customer directly & the payment being received by E-commerce.

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 10 April 2020

And "Supply of Goods & Services" is inserted under Sub clause 2A of Section 10 : (Inserted by Finance (No.2) Act, 2019) it's for the taxpayer availing benefits under Notification 2/2019 CT (r) ,