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Composition scheme

srikumar (audit staff) (1203 Points)

18 May 2020

sir, gst exempted goods are eligible for composition scheme?
my client start business unbranded rice and grocery stores. can I take registration on composition scheme? explain sir

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10 Replies

suraj zanwar (Student CA IPC / IPCC) (352 Points)
Replied 18 May 2020

No, you cannot get registration on composition scheme. Becoz in condition of compostion scheme it specificaly mention that dealer cannot supply gst exempted goods if he want composition scheme.

sreeja reddy (Articled assistant) (142 Points)
Replied 18 May 2020

Yes i also agree with Mr.suraj zanwar

Shivam RC (Student) (23683 Points)
Replied 18 May 2020

Yes Sir you can opt for Composition Scheme.

As per the Provision of Section 10(2) clause (b) of the CGST Act 2017, A person will not be eligible to opt for Composition Scheme if he is engaged in making any supply of goods which are not "leviable to tax" under this Act ( i.e. "Non-Taxable Supply" like Alcoholic liquor for Human Consumption, Petroleum Crude, High Speed Diesel, Motor Spirit, ATF and Natural Gas ).

Exempt Supply and Non-Taxable Supply are different.

Restriction is with regard to Non Taxable Supply only. Composition Scheme Dealers can supply Exempted Goods. No restrictions with regard to Exempt Supply.

Sir kindly Note that if your client is engaged in "EXCLUSIVE SUPPLY OF EXEMPT GOODS" , then he is not required to take Registration under GST as per Section 23 of the CGST Act 2017.

Regards
Shivam RC.

5 Like

srikumar (audit staff) (1203 Points)
Replied 18 May 2020

Some one say eligible and other says in eligible, exactly which one correct sir,

Shivam RC (Student) (23683 Points)
Replied 18 May 2020

I have given my personal view Sir and also quoted the appropriate Sections of the CGST Act 2017 in my reply Sir.

According to me you are Eligible Sir.

3 Like

srikumar (audit staff) (1203 Points)
Replied 18 May 2020

Ok thanks sir

saurabh sawlani (2157 Points)
Replied 18 May 2020

Shivam sir is always right

1 Like

Shivam RC (Student) (23683 Points)
Replied 19 May 2020

Thank You Saurabh...

1 Like

saurabh sawlani (2157 Points)
Replied 19 May 2020

Thanks to you sirji.. aapke ans. se hum kafi sikhte hai... toh aap ese query solve krte rahe or hum bhi sikhte rhe

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 20 May 2020

Composition scheme was introduced to ease the burden on small scale assessee, which reduces filing process and accounting. Although ITC is not eligible, concessional rates are provided. This would benefit those with less turnover and less manpower.

Where question is about exempt goods, as there is no tax there would not be any ITC eligibility too. Therefore registration has been eased for such persons.

What Shivam has replied is right, but wanted to inform about the use and benefit of composition scheme.