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Purchase from composition dealer

NISHANT SHAH (Tax Practioner) (235 Points)

09 September 2017

A registered dealer under gst purchase goods from a composition dealer. should he be liablie to pay gst under reveverse charge or not?

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19 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 09 September 2017

No.

RCM provision will apply only if the recipient is registered and the supplier is unregistered.

A supplier who has opted for composition would not charge GST on his supply but is nevertheless registered and does not attract this provision.

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NISHANT SHAH (Tax Practioner) (235 Points)
Replied 09 September 2017

But how registered person will take input credit

AVDHESH SINGHAL (B) (39 Points)
Replied 09 September 2017

when composition dealer will not charge GST then question about ITC does not arrive

1 Like

NISHANT SHAH (Tax Practioner) (235 Points)
Replied 09 September 2017

it means he can claim this in his purchase and need not to pat tax under reverse charge and will not claim any input

Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 09 September 2017

The composition taxable person, not elegible to collect on supplies to buyer. The recipient of goods are required to pay GST under RCM and take credit after payment of GST.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 09 September 2017

@ .NISHANTH.,
1. A registered dealer purchased from Composition dealer then he can't pay tax under RCM basis...
2. The composition dealer can't give Tax invoices. He ll give only Bill of supply. (It's like

1 Like

NISHANT SHAH (Tax Practioner) (235 Points)
Replied 09 September 2017

sir, is it mention somewhere in law, plz tell me so that i can refer

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 09 September 2017

cont....
(It's like cash memo. But, GSTIN). So, we can't get tax figure.
3. Yes. Purchased from Composition dealer then no claim ITC. It's treated as exempt then no need ITC and liability.....

CA Sanjay Kumar Maharana (SENIOR OFFICER(ACCT)) (184 Points)
Replied 10 September 2017

Composite dealer Cant charge GST on bill .also in bill Composite registration status to be written.Composite dealer is a registered dealer.so RCM not applicable.RCM applicable only for unregistered dealer.

Bikash (others) (22 Points)
Replied 02 February 2018

After a much discussion I am confused about govt. benifit on taxable goods.

Who are suggesting not to pay under RCM, the required tax may not be arised in that case.

How is it possible ?

But, on the other side the composition dealer have to pay @ 1% or 2% .

So, what will be the accurate tax if the commodity is of 5% ?

At last I reach on a decission, NO RCM NO ITC .

It may be right .

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Tomar Akash (2 Points)
Replied 15 March 2018

Dear sir can we show this purchase from compositions dealer in gstr 3b return under 5th head. Is it right or not

mohd aslam (accountant) (22 Points)
Replied 14 March 2019

for example i have regular Dealer. i bought goods from composition dealer to resale. So, what will be the accurate tax if the commodity is of 5% ? According commodity this goods taxable or exempt . may it be right ?

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 14 March 2019

Yes... It's taxable as per goods/commodity rate. As per your query the rate of Tax @ 5%

vijayalakshmivg viju (4 Points)
Replied 06 January 2020

I am a Composition dealer, i have purchased Goods from composition dealer & Sold goods to final consumer tell me the tax liability for me for 18% taxable goods