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Related to composition scheme

chetan (studant) (68 Points)

16 June 2017

whether a person eligible to opt composition scheme , if he is engaged in inter-state inward supply and intra-state outward supply

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7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182666 Points)
Replied 16 June 2017

Yes if turnover within 75L

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PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1448 Points)
Replied 16 June 2017

Yes Agree with Mr. Dhirajlal.......

Sk Suri (6 Points)
Replied 16 June 2017

no compo firm cant supply intra state outward maj S K suri

azrukhan (Student) (82 Points)
Replied 16 June 2017

Taxable person cant opt for composition scheme if he is engaged in inter-state supply

Lalit Nagpal (Assistant Manager) (541 Points)
Replied 18 June 2017

No inter state supply of goods for dealer registered under composite scheme.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182666 Points)
Replied 18 June 2017

Q. Mr. A registered in Rajasthan, who is selling goods from Rajasthan to Gujrat. Turnover of Mr. A is Rs. 73 Lakh in the preceding financial year. Whether Mr. A is eligible for Composition?

Whether your answer will change if Mr. A is making purchase from Gujrat and selling goods in Rajasthan?

A. Mr. A is not eligible for composition as he is making interstate outward supply.

If Mr. A is making purchase form Gujrat then he is eligible for composition as there is restriction on outward interstate supply not on inward interstate supply.

CA Vikas Modi, A K Sethi & Associates

https://tax guru.in/goods-and-service-tax/composition-scheme-under-gst-with-examples.H T M L

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182666 Points)
Replied 18 June 2017

The registered person shall be eligible to opt for the Composition Scheme, if(Section 10(2) of CGST Act,2017): —

(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II; (Analysis: This means that the Composition scheme is available for the service provider only if he is engaged Supply, by way of or as a part of any service or any other manner whatsoever of goods being food or other article for Human Consumption or any drink)

(b) he is not engaged in making any supply of goods which are not leviable to tax under this Act;

(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council.

Provided that where more than one registered persons are having the same Permanent Account Number (issued under the Income-tax Act, 1961), the registered person shall not be eligible to opt for the scheme unless all such registered persons opt to pay tax under that sub-section.

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Conditions and Restrictions for Composition Levy- Rule 3 of the Composition Rules,2017

He shall neither be a Casual Taxable Person* nor a Non-Resident Taxable Person.

In case of migration of existing registration into registration under GST, option to avail composition scheme under GST can be exercised only if the goods held in stock by such taxable person, on the appointed day have not been purchased in the course of inter-state trade or commerce or imported from a place outside India or received from his branch situated outside the State, or from his agent or principal outside the State.

The goods held in Stock by him have not been purchased from an Unregistered Person and where purchased, he pays tax under Sec 9(4) i.e. Reverse Charge.

He shall Pay tax under Sec 9(3) & (4) on inward supplies of goods or services or both received from an unregistered person.

Taxable person opting to pay tax under the composition scheme is prohibited from collecting tax on the outward supplies.

The person opting for the scheme should not be a manufacturer of certain goods as are notified in this regard. However, there is no restriction in case the person is engaged in trading of such goods.
A person opting for composition scheme is not allowed to affect any supply of goods through an ecommerce portal, unless such portal is owned by the same person.

The taxable person should not affect any inter-State outward supplies. This means that even stock transfers to branches outside the State would not be permitted. However, insofar as it relates to inter-State inward procurements / receipts, there is no restriction.

To explain further, where a taxable person effects inter-State barter transaction (supply) or inter-State warranty contract (supply), he will not be eligible to opt for composition scheme.

Extract from: CA CS CMA Rohit Kapoor.

https://tax guru.in/goods-and-service-tax/composition-scheme-under-gst-all-you-need-to-know.H T M L