Ans.

Who is not eligible for composition scheme under Sec 10 (2A)?

1. Engaged in any supply of which is not leviable under this Act (Non-GST Supply)
2. Engaged in interstate OUTWARD supply of GOODS & SERVICE,
3. Engaged in supply through E comm operator (Online Seller)
4. Engaged in manufacturing of Ice Cream, PAN Masala & Tobacco
5. Eligible for Composition Levy under Sec 10 of CGST Act,2017

Ans.

Concept of Marginal supply of Services

Fundamentally Composition Levy under section 10 can be avail by supplier of goods only and only
one service namely restaurant. However, there are certain cases where manufacturer/trader also
engage in supply of service other than restaurant.
Keeping in view the above situation government introduce second proviso to section 10(1) which
allow the supplier of goods to supply service upto a certain limit. The limits are prescribed as
follows-
• 10% of turnover in preceding year,
OR
• 5 Lakh,
Whichever is higher.

Example1- Ms. Ranjana Tiwari is an entrepreneur considering to get register in GST regime for
increase her scope of work. However, she is confused about the composition scheme specially
because she trades in goods, however she provides service of insurance, warranty & shipment
services which are ancilliary to the supply of goods. Advise Ms. Tiwari on “Marginal Supply of
services available” for supply of goods under section 10 of CGST Act,2017
Advise – If Ms. Ranjana Tiwari is eligible to get into composition scheme then as per second proviso
to section 10(1) of CGST Act,2017, she is eligible to supply services along with supply of goods as
follows-
• 10% of turnover in preceding year,
OR
• 5 Lakh,
Whichever is higher.

Now since Ms. Tiwari does’ have any turnover during previous year, she is eligible to supply service
along with supply of goods upto Rs.5 Lakhs.

Example 2- Mr. Prakash is engaged in supply of goods and register in composition scheme as
provided in section 10 of CGST Act,2017. His aggregate turnover during the year 2019-20 was Rs.80
Lakhs. Advise Mr. Prakash what would be the maximum amount of Supply of Service he can make
along with supply of goods.
Advise – As per second proviso to sec 10(1) of CGST Act 2017, marginal supply limit are as follows-
• 10% of turnover in preceding year, (i.e. 8 Lakh, 80*10%)
OR
• 5 Lakh,
whichever is higher
Hence Mr. Prakash can make supply of service of Rs.8 Lakhs in current FY 2020-21.