rent on let out property

Originally posted by : Dhana Sai
	sir my client was registered under gst as composition dealer and he started letting out his property for 200000 for residential use. and i know that it is exempted but it is a service . so whether we can continue as compo or converted to regular.

As Per Rule 6 of CGST Act

Validity of composition levy.-

(1)The option exercised by a registered person to pay tax under section 10 shall remain valid so long as he satisfies all the conditions mentioned in the said section and under these rules.

He should convert in Regular Scheme

In section 10 (2) of CGST Act Refer

 The registered person shall be eligible to opt under sub-section (1), if he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;

Here Supply of Service include both Taxable and Exempt services 

 

 

All businesses that have a turnover below Rs. 1.5 crorecan opt for composition scheme. For the states from the North-East and Himachal Pradesh, the limit is Rs. 75 lakh.

If the turnover of a business crosses the above mentioned limit, then said business will need to register for the regular GST scheme.

As per the 23rd GST Council Meeting held on 10th November 2017 and its further amendments the following changes to composition scheme were decided:

Eligibility for composition scheme has been extended to Rs. 1.5 Crore (maximum limit of Rs. 2 crore under the law)

There will be a single rate of tax of 1% both for manufacturers and traders.

Turnover of exempted goods will be excluded when calculating the turnover for GST payments.

Composition scheme dealers who supply services can do so for a sum of up to Rs. 5 lakh/annum

sir can u drop notification number please

As per Notification 46/2017 CT Dt. 13/10/2017 the threshold limit for Composition scheme is 1 crore & till date its 1crore only.

As per Amended Act 31,2018 , the its being inreased to 1.5 Crore & Can supply services upto 10% of Aggreagate Turnover or Upto 5lac whichever is Higher,. But the Provision of Act is not In force.

Now As you have contravened the provision of Section 10 , & before you get the Notice Under Form CMP 05 from proper officer its better to file CMP 04 , for withdrawal from Composition scheme (can File ITC 01 for any input in stock )

Sorry for my above reply as i Misread your Query... You can still continue with Composition Scheme as letting out of Residential Property is Exempted as per Notification 12/2017. And As per Order No. 1/2017 : If Composit Dealer supply any Exempted supply of services cant be ineligible for composition scheme Hence can continue under Composite scheme

sir order no 1/2017 about extension of availing composition levy .

Its Order No. 1/2017 UT , dt. 13/10/2017

Extract from above Order

i) it is hereby clarified that if a person supplies goods and/or services referred to in clause (b)
of paragraph 6 of Schedule II of the Central Goods and Services Tax Act, 2017 and also
supplies ANY exempt services, including services by way of extending deposits, loans or
advances in so far as the consideration is represented by way of interest or discount, the said
person shall not be ineligible for the composition scheme under section 10 of the said Act,
subject to the fulfilment of all other conditions specified therein.