COMPOSITION SCHEME FOR MEDICAL STORE AND LODGING AND BOARDING

[Fahiyaz Ahmmed]

Can a dealer obtain GST registration under the composition scheme for both a medical store and a lodging and boarding business? Plz clarify the doubt

[Sadanand Bulbule]

Dear querist

Your query relates to combined business of three different categories, namely, trading in medicines, supply of food articles and also supply of accommodation facilities together.In my understanding, the taxpayer supplying lodging[accommodation]services is not entitled for Composition Scheme.

[PAWAN KUMAR]

Composition scheme allow for supply of service - 10% of your annual turnover or 5 lakh whichever is higher. 

if main business is of supply of service then annual turnover limit is 50 Lakh.

[Sadanand Bulbule]

Dear querist

You need to be specific as regards to the category of supply of goods and/or services separately to opt for composite tax. However in the case of supply of accommodation services [lodging], the tariff rate for per room per day is the determinant factor. Section 10 provides general conditions which have to be read with related notifications.

[Shilpi Jain]

If revenue from your boarding and lodging is less than 10% of your total revenue -  you could be eligible for composition.

Further details regarding your total revenue, the proportion of goods and service revenue, etc. would be required to assess whether composition is eligible.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, Please refer to your views expressed at serial no. 3 above. Despite my all-out efforts, I could not trace out the hurdle in this scenario. Will you please throw more light on the issue regarding ineligibility for registration under composition scheme ? Is composite supply is the hurdle in this scenario ? 

Pl. advise for enrichment of my knowledge.

Thanks & regards.

 

[Sadanand Bulbule]

Dear Sir

Your observation is right. There are no hurdles in the scheme projected under Section 10 of the Act. Although it looks magnetic segment, it follows with many restrictions as well. So one need to be more careful to reap the advantage of the subject scheme. That's all.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, I am highly thankful to you for your response.

AI Summary

Composition scheme eligibility for mixed medical and lodging businesses hinges on service classification and revenue proportion. Eligibility for the Composition scheme for a combined medical store and lodging business turns on classification of supplies and the proportion of revenue from accommodation; composition for services is subject to prescribed turnover ceilings and fixed composition charges, and mixed or composite supplies and tariff treatment of accommodation can restrict eligibility under the statutory composition conditions and related notifications.