GST COMPOMSITION SCHEME

[TM ARJUN]

DEAR SIR

PLEASE GIVE ME DETAILS FOR - IF A DEALER ENGAGED BUSINESS IN LOCAL STATE ONLY BY MFG 50% AND SERVICES 50% , BOTH OF HIS TURNOVER BELOW 75 LACKS WHETHER HE IS ELIGIBLE FOR OPTION TO COMPOSITION TAX SCHEME UNDER GST.

T M ARJ

CHENNAI

[KASTURI SETHI]

Only one servic i.e. restaurant service is eligible for composition scheme. There is no such like 50 : 50 provision in GST.

[Mr Rao]

Dear querist

Small tax payers with an aggregate turnover in a preceding financial year upto ₹ 75 lakhs shall be eligible for composition levy. Under the scheme, a tax payer shall pay as a percentage of his turnover without the benefit of Input tax credit. A tax payer opting for composition levy shall not collect any tax from his customers. As rightly explained by Shri Sethi sir, in case of services, only restaurants can opt for composition scheme.

AI Summary

Composition levy limited to small taxpayers; only restaurants among services may opt, paying tax on turnover without input credit. Small taxpayers with aggregate turnover up to the specified threshold may opt for the composition levy, paying tax as a prescribed percentage of turnover without input tax credit and without collecting tax from customers; there is no provision for a 50:50 manufacturing/services exception, and among services only restaurant services are eligible to opt for composition.