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2020 (4) TMI 874 - AAR - GSTRate of tax - Benefit Composition Scheme available or not - Supply of services and goods - appellant engaged in the business of supplying goods under the trade name “Empathic Trading Centre” and is also a supplier of ser-vice of renting of immovable property - rate of composition tax applicable is 1% for the turnover of goods (sales) and 6% for the turnover of service (rent) - HELD THAT:- The applicant admittedly is supplying services and hence the eligibility for composition scheme is dependent on the satisfaction of the condition stipulated in the second proviso to sub-section (1) of section 10. If the turnover of services of the applicant exceeds ten per cent of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher, then he shall not be eligible to composition scheme. Even if the applicant obtains separate registration, one for the goods and other for the services, he would not be eligible for composition for both the lines of business. Hence the applicant is not eligible for composition under section 10 of the CGST Act if the turnover of services of the applicant exceeds ₹ 5 Lakhs or ten percent of turnover is the state, whichever is higher. N/N. 2/ 2019 - Central Tax (Rate) dated 07.03.2019 - HELD THAT:- The said notification prescribes the rate of tax for the “first supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person” and is not issued under section 10 of the CGST Act, 2017. Hence it is not a composition scheme but is an optional scheme. If the applicant opts out of the Composition levy and he obtains separate registrations for the two lines of business, as per second condition, he shall be liable to pay tax at 3% CGST and 3% SGST on the each of the turnovers of the registrations. The tax is on the entire aggregate turnover i.e all the “first supplies of goods or services or both upto an aggregate turnover of ₹ 50 Lakhs”. Hence the applicant is liable to pay tax under CGST Act at 3% and at 3% under KGST Act, if he opts to pay tax under the said Notification after opting out of Composition levy on the entire value of supplies made and he cannot apply different schemes for different types of transactions. Thus, the applicant is eligible to be in the composition scheme under section 10 of the CGST Act, 2017 if the turnover of services of the applicant does not exceed ten per cent of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.
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