Composition Scheme

[Lalitha Krishnamurthy]

Our client has exempt turnover of ₹ 30 lakhs in FY 2021-22 by way of rent from residential property and taxable turnover of ₹ 5 lakhs by way of management consultancy services.

As per our understanding he is required to take registration.

Would he be eligible for the composition Scheme and if so whether composition tax is to be paid on ,

 

AI Summary

Composition scheme eligibility: exempt rental may preclude composition or permit composition tax only on taxable services, assess carefully.
Eligibility for the composition scheme is disputed: one view disqualifies a taxpayer whose rental receipts are exempt because exempt supplies are treated as non leviable under the disqualification provision, whereas another view treats the taxpayer as eligible under the service provider composition option introduced after 2019, permitting payment of composition tax at the composite rate on taxable consultancy services while ordinarily not taxing exempt rental, but advising a careful cost-benefit analysis due to potential risk to exempt receipts.