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Whether GST composition scheme can be applied to restaurant run by resort ?

ASHLY ANSALAM (CA FINAL (1st group cleared) & ACCA STUDENT) (116 Points)

18 December 2019

Whether GST composition scheme can be apply to restaurant run by resort ? please explain the provision.

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Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 19 December 2019

No.......... you cannot opt for composition scheme for Restaurant under run by resort.
As per Section 10 , read with Rule the Service provider cannot opt for composition scheme except referred in clause (b) of para 6 of schedule II.
As per the proviso inserted vide amendment act 31 of 2018 , the composit dealer can provide services value upto 10% of turnover in the preceding FY or 5lac whichever is Higher.
And
As per the Proviso under sub section (2) of Section 10, Under same PAN you cannot opt for composition scheme & Reqular scheme at the same time. either all your business will be under composition scheme or Under Regular.

Hence In your case The resort is providing services (ie lodging) cannot opt for Composition scheme for Restaurant.

Note : As per sub-Section (2A) , if your turnover is below 50 lac , you can opt for composition scheme by paying tax @ 6% without ITC , covering both the business resort & restaurant under this scheme.