Composition levy

[Bharat Cholleti]

Dear sir,

Dealer registered as composition taxable person carrying trading activity and remitting 1% GST. Now he got a Civil contract from Local greater Hyderabad Municipal corporation at about Rs.50 lakhs can he pay 6% on these turnover. both clubbed turnover may not exceed Rs1-00 crore. Is there any restriction for doing service on the same composition. please clarify sir, thanks in advance.

[Amit Agrawal]

In my personal view, one can not opt for composition scheme/s u/s 10 (1) & 10 (2A) simultaneously.

And following proviso u/s 10 (1) needs to be noted: Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

Not allowed at all. I agree with Sh.Amit Agrawal Sir.

[Bharat Cholleti]

sir,

Okay sir,

Can the same person is eligible to apply another composition registration for the purpose and can do business?

[Amit Agrawal]

Proviso under Section 10 (2) reads as under:

Provided that where more than one registered persons are having the same Permanent Account Number (issued under the Income-tax Act, 1961) (43 of 1961) , the registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section.

Proviso u/s 10 (2A) reads as follows:

Provided that where more than one registered person are having the same Permanent Account Number issued under the Income-tax Act, 1961 (43 of 1961.), the registered person shall not be eligible to opt for the scheme under this sub-section unless all such registered persons opt to pay tax under this sub-section.

So, answer to your question in post as serial number 3 is NO, same is not possible.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Bharat Cholleti]

Thank you sir,

When vertical businesses is allowed why not this sir? vertical is also on the same PAN.

[Amit Agrawal]

Tax-payer can have two separate registrations for two different premises. But, he cannot opt for composition scheme/s u/s 10 (1) & 10 (2A) simultaneously - one way or other.

In other words, getting second registration does NOT allow tax-payer to opt for two composition scheme/s (i.e. u/s 10 (1) & 10 (2A)) in two different registrations.

Reasons for this is explained in earlier posts.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

AI Summary

Composition scheme restriction: one PAN cannot opt for multiple composition options across registrations, barring dual composition treatment. The composition regime prohibits a person from opting for different composition provisions simultaneously; provisos limit the proportion or monetary value of services a composition taxpayer may supply, and where multiple registrations share the same PAN no registered person may opt for the composition scheme unless all such registrants opt for it. A second registration at a different premise does not permit separate composition treatment under a different provision.