RAJAT SINGHANIA asked 7 years ago
COMPOSITION SCHEME
Heloo, I have a query related to Composition Scheme as follows-
Situation-
A manufacturer procures RAW MATERIAL (RM) FROM ANOTHER STATE, manufactures the finished goods (FG) and makes intrastate supply of the FG.
Analysis & Query- As per Rule 5(1)(b) of the Composition Rules, in order to opt for composition scheme, a condition has to be fulfilled i.e. the GOODS held in stock by a supplier, on the appointed day, have not been purchased in the course of inter-State trade or commerce. In my case, the manufacturer has procured the RM from other state, which is in stock as on the appointed date.
So can the manufacturer in this case opt for Composition Scheme? Do the word GOODS as mentioned in conditional Rule 5(1)(b) include RAW MATERIAL also?
ConsultEase Administrator answered 7 years ago
No, he will not be eligible for composition in transition.
RAJAT SINGHANIA answered 7 years ago
Thank You!
I have another query that can a composition dealer make Inter-State INWARD supply of goods? Since Section 10(2)(c) of CGST Act, 2017, specifically prohibits Inter-State OUTWARD supply.
Umang Agarwal answered 7 years ago
yes a composition dealer can make inter state inward supply of goods.
RAJAT SINGHANIA answered 7 years ago
Thanks Umang Ji!
Can you please give a reference to the respective Section/Rule so as to validate your answer and also for my reference.
