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Is reverse charge applicable to composition dealer?

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Is reverse charge applicable to composition dealer?

A composition dealer has to pay tax under reverse charge mechanism wherever applicable. This means that rate under composition scheme should not be used for reverse charge purposes. Also, no input tax credit is available for tax paid under reverse charge for a composition dealer.

What is eligible for composition scheme shall be liable to pay tax at the rate of?

Ans. The composition levy is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs. 75 lakhs ( Rs. 50 lakhs in case of few States).

Can a normal GST registered dealer make a purchase from a composition dealer and resell it to a normal GST registered dealer?

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Yes ofcourse, a normal GST-registered person can make a purchase from a composition dealer. But input tax credit of such purchase is not available to the GST registered person as a composition dealer cannot charge/collect GST on its sales.

Can reverse charge be adjusted against ITC?

ITC on reverse charge Input tax credit can be claimed by the buyer as long as they use the goods and services they bought on reverse charge basis for business purposes only. Also, a supplier cannot claim ITC on the tax paid on goods/services that were used to make supplies that incur reverse charge.

What are the different types of supplies which are liable to tax under reverse Chargemechanism?

Reverse Charge Mechanism on Goods & Services under GST

S.No. Description of supply of goods Recipient
3 Tobacco Leaves Any Registered Person
4 Silk Yarn Any Registered Person
5 Supply of Lottery Lottery distributor or selling agent
6 Used vehicles, seized & Confiscated goods, old & used goods, waste and scrap Any Registered Person
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Is e way bill required for composition dealer?

To carry E-Waybill is mandatory if the value of goods being transported exceeds Rs 50,000. Business registered under the Composition scheme is also required to generate e-Waybill and rules for the generation of the amount are the same as in the case of a GST registered person.

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