Composition dealer allowed to supply services

There are two major amendment in GST amendment act 2018 with respect to composition scheme, Earlier the threshold limit of turnover for the taxpayer to be eligible for the composition scheme is INR 1 Crore.

However, after amendment with effect from 01st Feb 2019 registered person having turnover up to INR 1.5 crore can opt for composition scheme.

Before 1st February 2019, Persons engaged in supply of services (other than restaurant service) are not eligible for the composition scheme or in other words person opted for composition scheme was not allowed to make supply of services.

With effect from 1st February 2019, Person opting for composition scheme is allowed to supply services other than services referred in para 6 (b) of schedule II. i.e. Restaurant services.

Total value of supply of services should not exceed higher of the following –

  • 10% of the turnover in the preceding financial year; or
  • INR 5 Lakhs
  • Rate of tax on services by composition dealer- .5% and .5%- SGST and CGST as per notification 8/2017 amended through notification 3/2019

 

The same can be understood with the help of following table:

Nature of business  Before 1st Feb 2019 After 1st Feb 2019
Person engaged in supply of goods Threshold limit of turnover was 1 crore Threshold limit of turnover incresed to 1.5 crore
Person engaged in supply of services  Not eligable for composition scheme other than restaurent services Service provider are eligible for composition scheme subject to certain conditions

 

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