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

Composition scheme liability for service providers: whether reverse charge and rent receipts count toward composition tax liability.
The dispute concerns whether a composition taxpayer must pay tax under the composition notification on outward supplies that are exempt or subject to tax on reverse charge. One view notes certain exempt services (interest/discount on loans/deposits) are excluded from aggregate turnover, that reverse charge supplies are recorded in the supplier's turnover, and that rent receipts count toward turnover. An alternative view argues the composition notification was issued without powers used for reverse charge notifications and that dual levy on the same supply (supplier under composition and recipient under reverse charge) is not warranted, so commission subject to reverse charge should not attract composition tax.