composition levy- sale of capital goods

[Richa Goyal]

I AM REGISTERED UNDER THE COMPOSITION SCHEME. I HAVE TO SELL SOME CAPITAL GOODS BOUGHT LAST YEAR.. DO I CHARGE GST ON THE SALE OF USED CAPITAL GOODS AND IF YES.. THEN AT WHAT RATE?

[ANITA BHADRA]

No as the composition dealer cannot collect tax paid

[DR.MARIAPPAN GOVINDARAJAN]

Since you have opted for composition scheme you have to pay the tax and you cannot collect it from other persons and also take credit of the same.

AI Summary

Composition scheme restrictions: dealers may not collect tax from buyers and must discharge tax under the scheme. Composition dealers are precluded from collecting tax from other persons and cannot claim input tax credit; they remain liable to discharge tax under the composition scheme itself. Therefore a composition dealer should not charge GST to the purchaser of used capital goods and cannot take credit for inputs.