Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

Law Related Issues

20 Availability of Composition Scheme to various assessees

Section 10 of the CGST Act, 2017 provides for Composition Scheme availability to registered persons whose aggregate turnover in the preceding financial year did not exceed
Rs. 75 lakhs.

Issue

The benefit of composition scheme is available for works contract as defined in clause (119)
of section 2 & supply, by way of or as part of any service or in any other manner whatsoever,
of goods, being food or any other article for human consumption or any drink (other than
alcoholic liquor for human consumption), where such supply or service is for cash, deferred
payment or other valuable consideration.

However, composition scheme is not available for other set of services not eligible for input
tax credit like outdoor catering, beauty treatment, health services, cosmetic and plastic
surgery, rent-a cab etc. as provided u/s 17(5)(b). Moreover, input tax credit is not allowed in
such supplies except when used for making outward supply of the same category.

This goes against the very intention of GST which was believed to bring manufacturers,
traders and service providers at parity. Such a provision may prejudice the interests of small
service providers not wanting to undertake the lengthy compliances applicable to a normal
supplier. This may further encourage tax evasion.

Suggestion
It is suggested that option of paying tax u/s 10 should also be extended to goods and services
covered u/s 17(5)(b), (c) & (d) and services provided by professionals having small turnover.

Read Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

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