Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Purchase from composition dealer

326 views

Save Share

bijo

Accountant

302 Points Posted on 23 November 2020

How should we have to show in our books,if purchase from composition dealer? under zero rated purchase or particular tax rated head?

Replies (4)

Quick Summary

When purchasing from a composition dealer, you'll receive a 'Bill of Supply' rather than a standard GST invoice. These purchases do not attract GST, and therefore, the concept of Input Tax Credit (ITC) does not apply. The purchase amount is treated as a cost for the buyer, as the composition dealer pays tax on their turnover.

gameplaysNmore

96 Points Posted on 23 November 2020

The composition dealer is not allowed to charge gst on invoices, hence the question of itc does not arise. As the composition dealer has to pay tax on turnover basis.

JATINDER KUMAR

Accountant

3662 Points Posted on 23 November 2020

Under purchase from composition dealer

ayusmita

Tax consultant

5895 Points Posted on 23 November 2020

When you buy from a composition dealer the purchase amount become the cost for the buyer
they will gives you bill of supply only
no reverse mechanism or input tax credit