Eligibility to apply for composition Scheme., Goods and Services Tax - GST

[Sangeetha D]

Is a trader in ice cream also ineligible to opt for the composition scheme?

Posts / Replies

[Sadanand Bulbule]

Yes, subject to threshold limit of turnover.

[YAGAY andSUN]

A trader in ice cream is ineligible to opt for the Composition Scheme under GST in India.

Here's why:

Under Section 10(2)(b) of the CGST Act, a taxpayer cannot opt for the Composition Scheme if they are engaged in the manufacture of goods notified by the Government as ineligible. One such notified item is ice cream and other edible ice, whether or not containing cocoa.

This was notified through:

Notification No. 14/2019 – Central Tax (Rate), dated 7th March 2019

It specifies that manufacturers or traders dealing in:

• Ice cream and other edible ice,
• Pan masala,
• Tobacco and manufactured tobacco substitutes,

are not eligible for the Composition Scheme.

Key Points:

• The restriction applies even to traders (not just manufacturers).
• So, yes, a trader in ice cream cannot opt for the Composition Scheme under GST.

***

[Sadanand Bulbule]

I endorse the factual reply of Yagay & Sun. Apology for incorrect earlier post. 

[Shilpi Jain]

A manufacturer of ice cream is not eligible for composition scheme. No such restriction for a trader. So can opt for composition scheme.

Section 10(2A)

a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council

Notification 14/2019 - CT

Provided further that the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, namely:-

TABLE

Sl. No.	Tariff item, sub-heading, heading or Chapter	Description
(1)	(2)	(3)
1.	2105 00 00	Ice cream and other edible ice, whether or not containing cocoa.

[Sadanand Bulbule]

Dear Yagay & Sun Sir

Plz re-validate my first reply and that of Madam Shilpi Jain as regards to the entitlement of composition benefit for TRADERS in ice-cream in view of the specific disentitlement for manufacturers of ice-cream in terms of Notification No. 14/2019-CTR to clear the decks.

[KASTURI SETHI]

  Dear Sir,

                      The word, 'trader' does not exist in the list of ineligible items for composition scheme.  Will you please clear the air ?

                      Thank you very much.