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What is the limit of composition scheme for services?

08 January 2024

Dear colleagues
good mrng,

Can composition registered dealers supply services?
If yes then what will be the criteria for turnover?
I read somewhere that from April 1, 2019, composition dealer can supply service up to Rs 50 lakh. Is this correct??

Regards

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14 Replies

Sharath chandra (Accountant) (1227 Points)
Replied 08 January 2024

Yes. for services only the limit is 50 lakh.

1 Like

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 08 January 2024

Yes I agreed with Mr Sharath Chandra...

@ Saurabh Sawlani,

Yes, You are exactly correct...

Can composition registered dealers supply services?
---> Yes, Composition dealer can make services....

If yes then what will be the criteria for turnover?
--> 50 lakhs if dealing with services...

Is this correct??
--> Yes, Correct.

1 Like

sabyasachi mukherjee (27574 Points)
Replied 08 January 2024

Services limit rs.50 lacs.

Sharath chandra (Accountant) (1227 Points)
Replied 08 January 2024

But if you are a dealer who is also providing services then the limit changes.

sabyasachi mukherjee (27574 Points)
Replied 08 January 2024

Not fully agreed

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Sharath chandra (Accountant) (1227 Points)
Replied 08 January 2024

Lol.... good for you

saurabh sawlani (2191 Points)
Replied 10 January 2024

Thanks Sharath & raja sir for your valuable guidance!!!
Sir, I have another confusion in this matter, if any composition dealer simultaneously supplies goods and services, So what will be the criteria for supplying services to that dealer(turnover criteria for supplying services)??

regards

1 Like

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 January 2024

Originally posted by : saurabh sawlani
	Thanks Sharath & raja sir for your valuable guidance!!!Sir, I have another confusion in this matter, if any composition dealer simultaneously supplies goods and services, So what will be the criteria for supplying services to that dealer(turnover criteria for supplying services)??regards

150 lakhs For goods only...

50 lakhs for Service (goods and Service)

For Your Reference (from TAXES.TRIPURA.GOV.IN) :

9. Can supplier of Services opt for composition levy?

Ans. No, the only exception being supplier of restaurant services.

But supplies of goods or services or both upto an Aggregate Turnover of Rs.50 lakh made on or after the 1st day of April in any financial year, by a registered person may opt for composition scheme. This option come into force on the 1st day of 2019 and rate of tax 3% CGST & 3% SGST.

Sharath chandra (Accountant) (1227 Points)
Replied 10 January 2024

Too refine above answer.. 10 percent of goods can be services. not more than that

1 Like

sabyasachi mukherjee (27574 Points)
Replied 15 January 2024

Nothing great as per relevant sections.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 15 January 2024

Please quote the RELEVANT SECTIONS & EXPLAIN THE PROVISIONS...

sabyasachi mukherjee (27574 Points)
Replied 17 January 2024

I will quote the page number of the guidance notes by icai. read it and report.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 17 January 2024

Ohh...

Finally you found the details (I think fake may be) from past 7 days...

But, Give also explanation for that...

Snigdha Bhowmick (NA) (7 Points)
Replied 17 January 2024

Hello,

As per my understanding following are the provisions for supply of services by person registered under composition scheme.

As per 2nd Proviso to Sec 10(1) of CGST Act, A person registered under composition scheme may supply services, subject to the condition that value of such service is up to 10% of Turnover in State / Union Territory in previous Financial Year, or Rs. 5,00,000, whichever is higher. The limit is to be checked state wise.

So basically, this provision is for such composite suppliers, who supply goods as well as services.

But if the supplier only supplies services, he will have to get registered under Sec 10(2A) of CGST Act. He can avail this section only if his aggregate turnover in the previous financial year does not exceed Rs. 50,00,000.

Hope I am able to clarify your doubt.