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CA Intermediate · Taxation · Charge of GST

Ananya Foods, Pune, a regular taxpayer, has aggregate turnover of Rs 60 lakh and wants to know whether it can pay tax under the composition scheme for goods. Which of the following is correct regarding the composition levy under section 10 of the CGST Act, 2017 for a registered person supplying goods only, in a normal (non-special category) State, for the current year?

The composition scheme is available only if the aggregate turnover in the preceding financial year did not exceed Rs 1.5 crore, and the composition dealer cannot collect tax from customers. Turnover of Rs 60 lakh qualifies, but ITC is not allowed and tax cannot be charged separately.

  1. AEligible only if aggregate turnover in the preceding year did not exceed Rs 1.5 crore, and the person cannot collect tax from customersCorrect
  2. BEligible regardless of turnover, if no inter-State outward supply is made
  3. CEligible only if turnover is below Rs 20 lakh, and ITC may be claimed
  4. DEligible if turnover does not exceed Rs 1.5 crore, and tax may be collected from customers separately

Explanation

Composition under section 10(1) is available to a registered person whose aggregate turnover in the preceding financial year did not exceed Rs 1.5 crore. A composition dealer cannot collect tax from customers and cannot claim ITC. Option D is wrong because tax collection is prohibited; option C is wrong on both limit and ITC.

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