Compostion scheme - mrp

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2018 As per the GST Rules/laws, a registered person who had opted for Composition Scheme cannot raise CGST/SGST in the bills/Invoices as he is not entitled to collect the same from the customers. In case if a retailer or trader is under composition scheme and he sells the goods as per the MRP printed in it. Then in this case, what will be the situation. as it has been said MRP is inclusive of all taxes. In other words, it can be said even if the retailer is under composition scheme yet he is collecting tax from customers by way of selling goods at MRP. Please expalin.

R. B. Yadav (CMA, LLB)

R. B. Yadav (CMA, LLB) (Expert)
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05 July 2018 Yes, if he is selling goods on MRP, it means dealer is collecting GST from customer and violating provision of GST Act, 2017.
He should sell the goods after reducing MRP by GST amount by doing backward calculation.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2018 Thanks. But sir no alteration on MRP is allowed. Can the dealer be held wrong for selling at MRP.

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Prakash Kochar

Prakash Kochar (Expert)
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06 July 2018 Dealer under composition can not charge tax separately. i.e. he can not issue tax invoice, as per restriction for composition dealer. He can sale goods at MRP.

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2018 But MRP is inclusive of tax. Which means he is collecting tax despite being under composition scheme.

Sunil

Sunil (Expert)
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06 July 2018 Composition dealer or URD can sell at MRP. Only they cannot charge tax separately. The Bill of Supply by composition dealer inclusive of tax.o

Prakash Kochar

Prakash Kochar (Expert)
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06 July 2018 Selling price must not be above MRP Whether tax is separately charged or may be inclusive, as such no fault under MRP. Under GST no tax can be seperately collected by composition dealer, which dealer is not collecting. As such no default under any of the provisions.

Sunil

Sunil (Expert)
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07 July 2018 Agreed. Composition dealer price is deemed to include tax and he cannot charge separately. Therefore he can rightfully issue bill of supply at MRP as technically all input taxes are included in his price. Only he has compromised by not taking advantage of input against output by opting for composition scheme. Therefore no offence under GST or Ministry of Consumer Affairs.

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