how to deal in Trading when purchase form Composite scheme dealer

[RameshBabu Kari]

Dear Experts,

how to deal in Trading when purchase form Composite scheme dealer ? Shall we collect tax on sale of particular products which were bought from Composite scheme dealer ?

[Himansu Sekhar]

Yes, you have no scope to take ITC. Every supply under sec 7 with a consideration subject to sch. I and Ii should be chargeable to gst.

[KASTURI SETHI]

Purchases made from Composition dealer are not GST paid goods but are exempted goods. Am amount of 1 % or 2 % paid by the Composition dealer is not GST but an amount to be paid by Composition dealer from his own pocket.

AI Summary

Input Tax Credit unavailability: Purchases from composition dealers require GST charging on onward taxable supplies. Purchases from composition scheme dealers do not carry transferable Input Tax Credit; buyers cannot claim ITC on such acquisitions. The nominal levy paid by a composition dealer is treated as discharged by that dealer and not as tax-paid input for the purchaser. If the purchaser makes onward supplies for consideration that fall within the taxable ambit, those onward supplies are subject to GST and must be charged and discharged by the seller in the normal course.