Do composition dealer need to pay 1% tax on nil (0%) rated supply.
Legal provision -
Reference to section 10 ,CGST Act 2017
Registered persons under GST opting for Composition scheme have to pay tax on "turnover in state" at either of the three tax rates:-
If person is
- a Manufacturer - 1% CGST & 1% SGST
- a hotel ,restaurant etc providing supply of service under para 6 (b) of Schedule II.- 2.5% CGST & 2.5% SGST
- ANY Other - 0.5% CGST & 0.5% SGST.
Note:- Key term to know is the " turnover in state"
Turnover in state includes -
1.all taxable supplies + all exempt supplies (including non taxable supplies) +exports supply + inter - state supply.
Answering your question - Yes , Turnover for Tax in composition scheme will include Nil rated supply
For exempt supply definition
Hope it helps .
Thanks and regards
Prashant (CA Final Student)
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