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Composition Scheme - Drinking Water

Krishna (Manager - Genesis Tax Consultant) (531 Points)

20 January 2020

Dear Sir / Madam,

Mr X is doing a water business also having his own Water plant, and his turnover is around 1 crore for the year.

He sells water with label Packing and also sells in a container without labelling.

He does both Taxable and Exempted sales.

My question, when he choose Composition Scheme should he need to pay 1% tax for exempted sales also?

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7 Replies

Anshuman Basu (account -GST) (1556 Points)
Replied 20 January 2020

I thik you should go for regular registration

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Krishna (Manager - Genesis Tax Consultant) (531 Points)
Replied 20 January 2020

Dear Sir, Why should for regular registration?

Anshuman Basu (account -GST) (1556 Points)
Replied 20 January 2020

In comparison scheme there are few limitation. U not take ITC. U not sale inter state

Shivam RC (Student) (23683 Points)
Replied 21 January 2020

You can opt for COMPOSITION SCHEME Sir if your Aggregate Turnover does not exceeds Rs. 1.5 crore.

As far as the GST Rate is concerned, it is 1% for the Manufacturer ( 0.5% CGST + 0.5% SGST ). This 1% GST needs to be paid on the Turnover in State or Union Territory. Even on Exempted Supplies , you need to pay 1% GST.

Only the Traders are required to pay 1% GST on their "TAXABLE SUPPLY OF GOODS" ( i.e. they are not required to pay GST on exempted supply ) vide Notification No. 01/2018 - CT , dated 01.01.2017.

Refer Notification No. 08/2017 - CT, dated 27.06.2017 read with Notification No. 01/2018 - CT, dated 01.01.2018.

Warm Regards.

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 21 January 2020

Yes ..... if you are engaged in Manufacturing ,you are liable to pay 2% GST (1% CGST + 1% SGST) on Exempted supply also.

Kindly Refer Notification 8/2017 CT & Notification 1/2018 CT

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Krishna (Manager - Genesis Tax Consultant) (531 Points)
Replied 21 January 2020

Dear Experts, Thank you for all your updates!!

Krishna (Manager - Genesis Tax Consultant) (531 Points)
Replied 21 January 2020

Dear Sir,

I have a clarification, in the below notification, as mentioned above the traders not required to pay tax on exempted goods no where it has been mentioned. Could you please assist me in this regard

Notification No. 1/2018- Central Tax

New Delhi, the 1 st January, 2018

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.8/2017- Central Tax, dated the 27 th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 647 (E), dated the 27 th June, 2017, namely:-

In the said notification, in the opening paragraph, - (a) in clause (i), for the words “one per cent.”, the words “half per cent.” shall be substituted; (b) in clause (iii), for the words “half per cent. of the turnover”, the words “half per cent. of the turnover of taxable supplies of goods” shall be substituted.