TaxTMI 
TaxTMI 
Interstate Sale by Composition Dealer
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....nterstate Sale by Composition Dealer <br> Query (Issue) Started By: - Gourav Ravi Garg Dated:- 13-8-2026 Goods and Services Tax - GST <br> Got 4 Replies <br> GST<br> <br> Respected professionals, one of my clients is an registered composition dealer in GST. He receives payment from Different state thus selling them goods. Is there is any way, wherein he can continue doing interstate sale ; or any ....
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....walk around the law or practice? --Reply By: Shilpi Jain The Reply: He has to move to regular registration the moment he has made the inter-State sale --Reply By: Sanjeev Agarwal The Reply: Clear conclusion A composition dealer cannot directly make inter-State outward sales of goods. If goods are actually moved from one State to another pursuant to the sale, the composition restriction appl....
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....ies. However, payment from another State or having a customer in another State does not, by itself, make the supply inter-State. The actual movement/delivery and place-of-supply facts must be examined. Legitimate options * If goods are delivered within the same State: The transaction may be intra-State even if the customer is located/payments originate elsewhere. Verify the actual delivery and ....
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....contractual facts. * If goods are genuinely dispatched to another State: The composition dealer cannot continue that direct sale under composition. There is no defensible invoice/payment-based workaround. * Independent reseller model: A genuine independent reseller can purchase from the composition dealer and separately make the inter-State sale. However, it must be a real commercial transac....
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....tion, not a paper arrangement. * Regular GST: If interstate sales are an integral part of the business, the cleanest and lowest-risk solution is to exit composition and operate under the regular scheme. Bottom line No legitimate "walk-around" exists for a composition dealer to directly sell and dispatch goods interstate while remaining in composition. The only defensible planning is to establis....
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....h that the supply is actually intra-State, or use a genuine independent reseller, otherwise shift to the regular GST scheme. Risk position: Direct inter-State sale while remaining in composition - High/Clear non-compliance risk. --- Sub-Reply By: Sadanand Bulbule The Sub-Reply: I endorse the replies of experts. --Reply By: KASTURI SETHI The Reply: Inter-State sale is not allowed to the Compo....
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....sition Dealer. <br>***<br> Discussion Forum - Knowledge Sharing....