GST rate under composition scheme for supply of both goods and service together- Karnataka AAR

Applicant is engaged in supply of goods and renting of immovable property. He states that he is eligible for composition scheme as his turnover is way below Rs. 50 lakh as the scheme is applicable for both goods and service.

The applicant has applied for advance ruling to know whether 1% rate would apply on goods and 6% on service as both are unrelated or 6% on entire turnover.

AAR ruling:

Authority for Advance ruling went on to check eligibility under section 10(1) and notification 2/2019.

In notification 2/2019 it was mentioned that if a person becomes ineligible to pay tax under composition scheme as per section 10(1) ( Section 10(1) covers trader or a manufacturer who can provide services upto 10% of turnover or Rs. 5 lakh whichever is higher), he can pay tax at 3% CGST and 3% SGST or UGST of total turnover.

Thus, considering the above notification AAR ruled that rate of tax applicable on the entire value is 3% CGST and 3% KGST and he cannot pay tax at 1% on supply of goods and 6% on supply of service.

To read full order CLICK HERE.

This article is just for information purpose and are personal views of the author. It is always advisable to hire a professional for practical execution or you can mail us. If you need assistance you can ask a question to our expert and get the answer within an hour or post a comment about your views on the post and also subscribe to our newsletter for latest weekly updates.