Question : How would a manufacturer under the composition scheme who receives inputs or input services from an unregistered person pay GST ? What will be the tax rate if the purchase is from a person availing composition ?
Answer: GST will have to be paid on inputs and input services received by such manufacturer under reverse charge at normal rates and not at the composition rates.
Purchase from a person under the composition scheme is purchase from a registered person and hence will not attract tax under reverse charge under section 9(4) of the CGST Act, 2017.
Any person migrating from the existing law to a composition scheme and holding stock of goods purchased from unregistered persons is required to pay tax on such goods.
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