Persons not eligible to opt for composition scheme [Section 10(2)]
The following person are not eligible to opt for composition scheme
- Supplier of goods or services which are not taxable under the CGST Act/SGST Act/ IGST Act.
- An inter-state supplier of goods or services
- Person supplying goods or services through an electronic commerce operator who is required to collect tax source under Section 52
- Manufacturer of certain notified goods
- Casual taxable persons
- Non-resident taxable persons
- Supplier of services other than those mentioned in provision of this act.
Ineligible Manufacturer
The manufacturer of following goods will not be eligible to opt for composition scheme
- Ice cream and other edible Ice, Whether or not containing cocoa
- Pan masala
- Aerated Water
- All goods, i.e Tobacco and manufacturer tobacco substitutes
Composition Scheme is applicable to all tractions of registered person with same PAN
All registered persons having the same Permanent Account Number(PAN) have to opt for composition scheme. If one registered person opts for normal Scheme, others become ineligible for composition scheme.
Example
If taxable person has the following business separately registered
- Sale of footwear (Registered in Karnataka)
- Sale of mobiles (Registered in Karnataka)
- Sale of ready-made garments (Registered in Rajasthan)
In the above scenario, the composition scheme would be applicable for all the 3 units. Taxable person will not be eligible to opt for composition schemes say for sale footwear and sale of mobile and opt to pay taxes under the regular scheme for Ready-made garments.
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