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Whether composition dealer under GST can purchase goods from outside state

CA S Praveen Kumar Reddy (Chartered Accountant) (2195 Points)

26 June 2017

Dear sir, whether composition dealer under gst can purchase goods from outside state. kindly give clarity.

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13 Replies

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 26 June 2017

Yes he can purchase it from outside state.

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 26 June 2017

But there is restriction on inter state supply

1 Like

Vineet Aggarwal (Accounts Officer) (316 Points)
Replied 26 June 2017

No he can't purchase interstate under composite scheme gst act

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 26 June 2017

He can refer Sec 10 in this regards.

1 Like

Vineet Aggarwal (Accounts Officer) (316 Points)
Replied 26 June 2017

There is nothing like written that he can deal with interstate purchase.

Dileep Panchal (ASSISTANT CS) (189 Points)
Replied 26 June 2017

yes he can purchase from outside state but can not supply outside state

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 27 June 2017

It is clearly mention not dealing in outward supply means inward supply is allowed.

1 Like

vaibhav singhi (CA working in M&A) (314 Points)
Replied 27 June 2017

He can puchase He will not get tax credit

CA Udit Agarwal (Chartered Accountant) (49 Points)
Replied 10 August 2017

Yes he can purchase from Outside the state. The restriction is for Inter-state Outward Supplies not for Inward Supplies.

CA Udit Agarwal (Chartered Accountant) (49 Points)
Replied 10 August 2017

Yes. Sec 10 of CGST Act 2017 clearly states the conditions of Composition Scheme. One of the condition is that the registered person cannot make inter state outward supply (i.e. sales).

But there is no such restriction on inter state purchases.

ABHISHEK KUMAR SINGH (STUDENT) (22 Points)
Replied 15 December 2017

It is mentioned that composite scheme is available for dealers doing "intra-state supplies". If a dealer is involved in inter-state supplies , then they have to opt OUT of the scheme.

Many of my seniors are asking that inter-state supplies, only means Sale, but that not the fact. If inter-state includes only sale, than the "intra-state supplies" will also include only sale, so from where the delaer will purchase.

HENCE THE CONCLUSION IS IN COMPOSITE SCHEME, THE DEALER CAN'T MAKE ANY SALE OR PURCHASE FROM OUTSIDE THE STATE.

3. What are the conditions for availing Composition Scheme?

The following conditions must be satisfied in order to opt for composition scheme (updated on 14th december 2017):

No Input Tax Credit can be claimed by a dealer opting for composition scheme
The taxpayer cannot make any inter-state supply of goods.
The dealer cannot supply GST exempted goods
Taxpayer has to pay tax at normal rates for transactions under Reverse Charge Mechanism
If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
Those supplying goods can provide services of upto Rs. 5 lakh,

Thank you.