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CA Intermediate · Taxation · Charge of GST

Under the CGST Act, 2017, which of the following is a correct statement about the levy of tax on a composition-scheme taxpayer who is a manufacturer?

A composition-scheme manufacturer pays tax at a specified percentage of turnover and cannot collect tax from customers. He also cannot claim input tax credit and issues a bill of supply instead of a tax invoice.

  1. AHe must charge GST at normal rates and collect it from customers
  2. BHe pays tax at a specified percentage of turnover and cannot collect tax from customersCorrect
  3. CHe can collect tax and claim input tax credit
  4. DHe is exempt from all GST provisions

Explanation

A composition taxpayer pays tax at a fixed percentage of turnover in the State and cannot collect tax from recipients; he also cannot claim input tax credit. He must issue a bill of supply, not a tax invoice.

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