Skip to content

CS Executive · Tax Laws and Practice · Levy and Collection of GST

A composition taxpayer under section 10(1) makes a purchase of goods carrying input tax and sells goods to a customer. Which statement correctly reflects section 10(4)?

He can neither collect tax from the recipient nor claim input tax credit. Section 10(4) imposes both restrictions on a person paying tax under the composition scheme, so he bears the tax himself and cannot take credit of tax paid on inputs.

  1. AHe may collect tax from the recipient but cannot claim input tax credit
  2. BHe may claim input tax credit but cannot collect tax from the recipient
  3. CHe may neither collect tax from the recipient nor claim credit of input taxCorrect
  4. DHe may collect tax and claim credit if his turnover is below the limit

Explanation

Section 10(4) states that such a taxable person shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. Both restrictions apply together, so options allowing either one are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Levy and Collection of GST shows your real accuracy, how long you take and where you lose marks.

Practise Levy and Collection of GSTFree diagnostic mock

More Levy and Collection of GST questions