Purchase from dealer registered under composition scheme

if you are purchasing from a  registered person who has opted for payment of gst on Compostion scheme under section 10 of the CGST Act 2017, you need to have to pay tax on RCM .  the composition dealer is not entitled to recover the tax from the  receiver of the supply.  He cannot issue a tax invoice.  he has to pay tax out of his proits.  Any way he will include this cost in his selling priuce and issue an invlice for the transaction value whihc may also include the tax element.  However, since you are not paying the tax on such supplies you may not be able to take input tax credit  in respect of such supplies.

There is no necessity for a registered person to pay tax on his purchases from dealer who is registered under composition levy.

Only on purchases from unregistered dealer you have to pay tax under reverse charege. 

i am reguler dealer, How can i bill of product whitch purchased from composition dealer???

i have also this query? should i make invoice and claim for RMC?

the compositon dealer is  not expected to levy and collect GST. so if you purchasefrom a composition dealer you should nt  pay GST to him.  you should  pay only the basic  price and no credit is available as no tax is paid.  so no questioin of any RCM. please avoid future purchases from composition dealers.

Deal all in above discussion chain,

I also hold the view that legally there is no need to pay tax under RCM on supplies received from composition dealers as on date the GST Acts stand. But it is also true no such exemption has been extended to the business entities (BE) except when underlying supply is exempt i.e. all the taxable supply received by BE has to suffer GST.

When BE procures from composition dealer whose supply is taxable should also suffer taxes. The GST levy holds true. It is only in case of section 9(4), this found to be not covered i.e recipient has not be brought under ambit of deemed suppliers.

Hence, I expect an amendment sooner than later with retrospective effect. Assessees will have to pay the taxes.

This also finds more weightage in case where assessees are under duty drawback scheme and procures from composition dealers.........here those procurers will be in advantage position. There is also a theory that tax cost of composition dealers would be factored in value of supply.........but I haven't seen a good argument where such dealers are procuring from other composition dealers only.

Fingers crossed till some genuine justificatio or amendment moves in.

Regards,

Ashok