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job work under composition scheme

Yogesh Sharma (86 Points)

16 May 2018

can a composition dealer issue bill for job work/ is he eligible for doing job work. if yes then what are the limits

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 16 May 2018

No , composition cannot provide services (Except Resturant)

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Shashank Saxena (Student CA Final ) (96 Points)
Replied 16 May 2018

As per Sec 10(1) of CGST Act a taxpayer whose turnover is below Rs 1.5 crore* can opt for Composition Scheme (In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh) if he satisfy following conditions:

He is not making any interstate outwards supply of goods.
He is not a supplier of services other than restaurant related services.
He is not engaged in making any supply of goods which are not leviable to tax under this act.
Casual taxable person or a non-resident taxable person.
He is not engaged in making any supply of goods through an e-commerce operator.

Person satisfying above conditions can register himself as composition dealer under GST but if such person ceases to satisfy above conditions after registering himself as composition dealer then:

As per Sec 10(3) read with rule 6, such person will be required to pay tax at normal rate under sec 9(1) from the day he ceases to satisfy any of the above prescribed conditions for composition levy. He shall issue tax invoice for every taxable supply made thereafter.

Conclusion: Since you are registered as composition dealer you are not allowed to provide any kind of service except restaurant service. Job work is treated as supply of service as per Schedule II of Sec 7 hence if you provide job work service to any person then you will violate the conditions of composition scheme and you will be liable to pay tax under sec 9(1) at normal rate.However no limit will be applicable in such case and you can freely issue tax invoice and pay tax at normal rate.

Hope the above information is helpful.

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