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All QuestionsCategory: GST CompliancesCOMPOSITION SCHEME
Profile photo of RAJAT SINGHANIARAJAT SINGHANIA asked 1 year 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?

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4 Answers
Profile photo of Consultease AdministratorConsultease Administrator answered 1 year ago

No, he will not be eligible for composition in transition. 

Profile photo of RAJAT SINGHANIARAJAT SINGHANIA answered 1 year 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.

Profile photo of Umang AgarwalUmang Agarwal answered 1 year ago

yes a composition dealer can make inter state inward supply of goods. 

Profile photo of RAJAT SINGHANIARAJAT SINGHANIA answered 1 year 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.