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.
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.
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