EXAMPLE-97

M/s ABC Dairy  supplies fresh cow milk (exempt under GST) and also a manufacturer of ice cream,supplies ice cream which is taxable under GST. Their previous year turnover is of Rs 24 lakh for milk and Rs. 22 lakh for ice cream. The said company desired to opt for composition scheme in current financial year as his aggregate turnover is below Rs. 1 crore. All supplies are made intra-state. State whether M/s ABC Dairy eligible for Composition scheme.

 
Answer

Section 10(2) specifically provides that person engaged in making any supply of goods which are not leviable to tax under GST is not eligible for Composition levy. In the given example one of the supplies is fully exempted, therefore, the M/s ABC Dairy is not eligible for composition scheme for milk as well as for the second item.

Even otherwise,maufacturers of ice cream have become ineligible to opt for composition scheme as per Notification No. 08/2017-Central Tax dt.27.06.2017.

Hence, M/s ABC Diary is not eligible for Composition levy.