GST
Bill of supply and display rules for composition dealers
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Facts
A composition taxpayer issues a bill of supply, not a tax invoice, and writes 'composition taxable person, not eligible to collect tax on supplies' at the top. The words 'composition taxable person' must also be displayed at a prominent place at the shop.
Provisions and law
- Rule 5, CGST Rules 2017Conditions for composition, including no inter-State purchases from unregistered persons as stock, bill of supply wording and display at premises
- Sec 10(4), CGST Act 2017A composition taxpayer cannot collect tax from customers and cannot take ITC
- Rule 49, CGST Rules 2017Contents of a bill of supply
Analysis
Example: a sweet shop in composition issues a bill of Rs 500 with no GST line. Showing GST on the bill would mean collecting tax you are not allowed to collect. The display board helps customers and officers see your status. Update your billing software template the day composition starts.
Conclusion
- Change bill format to bill of supply with the required words
- Remove GST lines from bills
- Display 'composition taxable person' at the shop and on the signboard
- Train staff not to add GST
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Opting into composition, CMP-02
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