Lalit Enterprise is a registered person under composition scheme of GST in Kolhapur, Maharashtra, manufacturer of goods. Turnover of taxable supplies of Lalit Enterprise in the preceding financial year is ₹90 Lakh. In th

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · PYQS · December 2025
Lalit Enterprise is a registered person under composition scheme of GST in Kolhapur, Maharashtra, manufacturer of goods. Turnover of taxable supplies of Lalit Enterprise in the preceding financial year is ₹90 Lakh. In the current financial year, they want to enter the service sector also, being service provider for services other than restaurant services (not supplying alcoholic liquor for human consumption). Their GST consultant advised them to exit composition scheme if they want to provide services mentioned above. Whether the advice given by GST consultant is correct and also give comment as per the provisions of section 10 of The CGST Act 2017.

Answer & Explanation:

Advice given by the GST consultant is incorrect. As per the provision of section 10(1) (Composition Scheme) of CGST Act, where a manufacturer or trader is also engaged in supply of services other than restaurant services (not supplying alcoholic liquor for human consumption) can supply such services for value not exceeding: 10% of the turnover in a state in the preceding financial year OR ₹5 Lakhs whichever is higher 10% of ₹90 Lakhs i.e., ₹9 Lakhs OR ₹5 Lakhs whichever is higher Therefore, Lalit Enterprise can make supply of services up to ₹9 Lakhs (under composition scheme).

Topics: Goods and Services Tax (GST)

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