Padma Enterprises, a franchisee distributor and supplier of a branded ice cream is engaged in the supply of ice cream to wholesalers in the outskirts of the state of Delhi. Determine the eligibility of opting for the com

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · PYQS · June 2024
Padma Enterprises, a franchisee distributor and supplier of a branded ice cream is engaged in the supply of ice cream to wholesalers in the outskirts of the state of Delhi. Determine the eligibility of opting for the composition scheme in the above case. Would your answer be different, if he later plans to supply it to retail customers using online platforms through electronic commerce operator?

Answer & Explanation:

As per the provisions of section 10(1) of the CGST Act, 2017 A person is not eligible for composition scheme for goods, if he is Manufacturer of ice cream, pan masala, tobacco, and aerated waters. Thus, since Padma Enterprises is engaged in the distribution of ice cream, so it will be eligible for the composition scheme assuming the current year turnover does not exceed ₹ 1.5 Crore for the state of Delhi, not being out of 8 specified states. Further, if he in future sells online to retail customers using online platforms through Electronic Commerce Operator (ECO), still he can continue to be under composition levy. Prior to 1.10.2023, there was a restriction on availing composition levy for a registered person who was engaged in providing goods or services through an ECO. However, w.e.f. 01.08.2023, this restriction has been omitted.

Topics: Goods and Services Tax (GST)

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