Composition Scheme for Service Providers

[Parag Paranjpe]

Respected Professionals.

PLEASE refer Notification No. 2/2019-Central Tax (Rate)-composition scheme for supplier of services with a tax rate of 6% having annual turn over in preceding year upto Rs 50 lakhs.

As per Condition no 6 of the Table - The registered person opting to pay tax under this notification shall be liable to pay tax at the rate of six percent on all outward supplies specified in column (1) notwithstanding any other notification issued under sub-section (1) of section 9 or under section 11 of said Act

Following is my Query.

1. Which exempt supply are they referring to.?
2. If the assessee has a Commission Income from Insurance Sector -on Which GST is payable on RCM basis vide Notification No. 13/2017- Central Tax (Rate) dated 28th June, 2017( Entry no 7)- Then whether such Commission will also be considered while calculating liability of 6% under Composition Scheme( since its Part of Aggregate Turnover).
3. If the assessee is receiving income from Rent of premises(Residential or Commercial)- Whether such rent will also be considered while calculating liability of 6% under Composition Scheme( since its Part of Aggregate Turnover).

Your Kind Guidance will be appreciated.

Thanks

AI Summary

Clarifying GST Composition Scheme: Commission Income Under RCM and Rental Income in Aggregate Turnover for 6% Tax Rate A discussion on the Goods and Services Tax (GST) composition scheme for service providers addressed questions about the applicability of the 6% tax rate on certain incomes. A participant inquired whether commission income from the insurance sector, taxed on a reverse charge mechanism (RCM), and rental income should be included in the aggregate turnover for the 6% tax calculation. Responses clarified that exempt supplies, such as interest from loans, are not considered in aggregate turnover. It was argued that the government cannot levy tax on the same supply from both supplier and recipient, suggesting no GST is payable by the supplier for commission income under RCM.