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Composition Scheme extended to supplier of Services (1)

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Composition Scheme extended to supplier of Services (1)

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  1. Composition Scheme extended to supplier of Services

  2. Provision under Composition Scheme for Services Provider • 1. Applicability • 2. Applicable GST rate • 3. Specific Conditions for opting benefits under composition scheme for services provider • 4. How to calculate tax liability under composition scheme for service provider.

  3. 5. Other Points to be Considered: • If supplier is having more than one registration then all units will be required to opt this scheme. Accordingly, GST on all supplies should be discharged at 6% upto first aggregate turnover of INR 50 Lakhs. • Supplier will not collect GST from recipient, i.e., he should discharge GST from his own pocket. • Supplier will not be entitled to avail Input Tax Credit (“ITC”) • Supply of goods or service shall be made under cover of “Bill of Supply” issued in pursuance of provisions given u/s 31 of CGST Act, 2017 read with Rule 49 of CGST Rules. • Further, he should mention on words on top of bill of supply that “taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies”

  4. How to calculate tax liability under composition scheme for service provider. • To determine eligibility under this notification, supplies made from 1st April till the date person becomes liable to register under GST shall be added While computing “First supplies of goods or services or both”. • E.g. An unregistered person starts intra-state supply of service from 1st April. His liability to register under GST arises when his turnover exceeds threshold limit of INR 20 Lakhs. After obtaining registration, such registered person makes supply worth of INR 45 Lakhs. • Accordingly, person shall be entitled to opt composition scheme upto first supply of Rs. 50 Lakhs. He is required to discharge GST on remaining INR 25 Lakhs at applicable rates under this notification

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