COMPOSITION SCHEME UNDER GST

Example 1
M/s Y Ltd. being a trader of laptops has two units in Chennai and in Mumbai.
Place P.Y. Turnover ` in lakhs (Excluding taxes)
Chennai 52.00
Mumbai 12.00
Your are required to answer the following:
(a) M/s Y Ltd is eligible for composition levy in the current year.
(b) If so, M/s Y Ltd can opt composition scheme for Chennai location and normal scheme for Mumbai.
(c) Need to give separate intimations for opting composition scheme in each State.
Example 2
M/s X & Co., sells electrical cables, motors and wires. Company also undertake repair of switches, motor sets.
Turnover during preceding financial from sale of goods is Rs 59 lakhs, whereas repairing unit is ` 1 lakh.
M/s X & Co., is eligible for composition scheme. Advice.
Example 3
Mr. A is a paper merchant own 5,000 sq ft., shop at Chennai. Mr. A offered extra space available in their shop
to supplier to put up their advertisement. His turnover in the previous year from sale of goods ` 20 lakhs and
advertising services ` 2 lakhs. Mr. A is eligible for composition scheme in the current year
Example 4
Hotel King Pvt., Ltd. provider of restaurant services in New Delhi. They also serve beer, whisky and so on.
Turnover in the preceding previous year is ` 67 lakhs. Hotel King Pvt. Ltd. is eligible for composition scheme
in the current year.

Example 5
Mr. C of Chennai is a retailer dealing with cell phones. He supplies goods to the person located in Chennai
and Pondicherry. Aggregate turnover in the preceding financial year is ` 45 lakhs. Mr. C wants to opt for
composition scheme in the current financial year.

Example 6
Peter England is a trader who sells his ready-made clothes online on Amazon India (an Electronic Commerce
Operator). He received an order for ` 12, 00,000 in the previous year. Peter England also supplied goods from
there out lets. Aggregate turnover of the company in the previous year was ` 21,00,000.
Peter England is eligible for composition scheme.

Example 7
Hot Breads Pvt. Ltd is the supplier of bakery products registered in the current financial year (2017-18) w.e.f.
1st Oct 2017. In the month of Oct 2017 total taxable supplies ` 88 lakhs. Answer the following:
(a) Company is eligible for Composition Scheme?
(b) If so company wants to pay tax @ 1% being a trader. However, the Deputy Commissioner of Central Tax
contended that the assessee is liable to pay tax @ 5% under the Food and Restaurant Services category?
Advise.

Example 8
Hotel King Pvt. Ltd. is a registered person under GST. P.Y. turnover was ` 100 lakhs. Applicable GST 18%.
Inputs cost ` 7,80,000 (exclusive of GST 18%). Profit margin is 40% on cost. Find the invoice price and
advice the best option to pay tax if any. There is no opening balance and closing balance for the tax period.

Example 9
If a person is liable to be registered on 11th Oct 2017 and he has applied for registration on 17th Oct 2017,
what is the effective date of registration for composition levy.
Example 10
A person is liable to be registered on 1st Oct 2017 and he has applied for registration on 17th Nov 2017.
Registration granted on 20th Nov 2017. What is the effective date of registration if he wants to opt
composition levy.
Example 11
Mr. Ram is running a consulting firm and also a readymade garment show room, registered in same PAN.
Turnover of the showroom is ` 60 lakh and Receipt of the consultancy firm is ` 12 Lakh in the preceding
financial year.
You are required to answer the following:
a) Mr. Ram is eligible for Composition Scheme?
b) Whether it is possible for Mr. Ram to opt for composition only for Showroom?
c) Rework, if Mr. Ram is running a restaurant and well as readymade garment show room, whether he is
eligible for composition?
d) If the turnover of garment showroom is 75 Lakh in the preceding financial year and there is no consulting
firm whether he is eligible for Composition?

Example 12
Mr. Rahim is dealer who is selling taxable goods, exempted goods and non-taxable goods (i.e. Liquor). His
turnover in the preceding financial year is ` 35 lakh, ` 10 lakh, ` 15 lakh goods which are leviable to GST,
exempted and non-taxable respectively. Whether MR. Rahim is eligible for Composition Scheme?

Example 13
Mr. H registered in Hyderabad, who is selling goods from Telangana to Tamil Nadu. Turnover of Mr. H is `
73 Lakh in the preceding financial year. Whether Mr. H is eligible for Composition?
Whether your answer will change if Mr. H is making purchase from Tamil Nadu and selling goods in
Telangana?

Example 14
Turnover of Mr. X in the preceding financial year is ` 49 Lakh. Mr. A has opted for Composition Scheme.
During the year on 18th February 2018, turnover of Mr. X exceeds ` 1 crore. What compliances are required
to carry by Mr. X.

Example 15
M/s X Pvt. Ltd., is a manufacturer having two units namely Unit –A in Andhra Pradesh and another Unit – B
in Tamil Nadu. Total turnover of two units in last Financial Year was ` 95 lakh (` 10 lakh of Unit – A + ` 85
lakh of Unit – B).
Total turnover of two units in the second quarter of this financial year was ` 15 lakh (` 5 lakh of Unit – A + `
10 lakh of Unit – B). Applicable rate of CGST 9% and SGST 9%. Find the Net liability of X Pvt. Ltd.
Note: M/s X Pvt. Ltd., is not availing input tax credit.

Example 16
Determine whether the supplier in the following cases are eligible for composition levy provided their
turnover in preceding year does not exceed ` 75 lakh:
(i) Mohan is engaged in providing legal services in Rajasthan and is registered in the same State.
(ii) Sugam Manufacturers has registered offices in Punjab and Haryana and supplies goods in neighbouring
States.

Example 17
A hotel owner provided accommodation in Haryana, through an electronic commerce operator – Cool Trips.
The hotel owner is not liable to get registered as per the provisions of section 22(1) of the CGST Act.
Who is the person liable to pay GST in this case?
Would your answer be different if the Electronic Commerce Operator Cool Trips does not have a physical
presence in India?