Important GST Rules When Paying Bills: Insights From CA Sakchi Jain

In the world of taxation, the difference between the composition GST scheme and the regular GST scheme can often be confusing to many business owners and consumers. If you are one of those, then don't worry. Recently, CA Sakchi Jain, a finance influencer, highlighted the difference between the composition GST scheme and the regular GST scheme on restaurant bills. 

In her recent video, she simply explained that the regular GST requires restaurants to register under the regular scheme, where they can claim tax credits on their purchases. On the other hand, composition GST is applicable to small restaurants with income limitations, offering them a simplified tax structure but refusing input tax credit. Let's learn more about composition and regular schemes.

Composition GST Scheme:

The composition the GST scheme is a scheme for payment of GST available to small taxpayers whose aggregate income in the previous financial year did not cross Rs. 75 lakhs. In some states, the limit on turnover is Rs. 50 lakh.

Regular GST Scheme:

Regular GST scheme is a tax system where a registered taxpayer collects and pays GST on the value of the goods and services supplied.

GST Composition Scheme Rules for Restaurants: 
 

• Should not be engaged in any services other than a restaurant.
• Restaurants cannot make an outward supply of goods.
• Items that are not taxable under GST cannot be supplied. 
• Restaurants cannot assist with any input tax credits.
• They cannot collect taxes from the customer.
• Don't Make This Mistake While Paying Bills: 

Businesses or individuals registered under the composition scheme are not allowed to issue tax invoices or GST invoices, as they cannot charge GST on outward supplies of goods or services.

Thus, a composition dealer has to issue a bill of supply in the event of an outward supply of goods or services.

Though many consumers are not aware that service charges are optional and the customer is only liable to pay if they want to, according to consumer rights, the customer can complain about the restaurant if they are pressured to charge a service tax.

How to Check If a GST Number is Composition or Regular?

• Login to the GST Portal.
• Navigate to ‘Search Taxpayer'.
• Enter GSTIN or state details.
• Review Status 

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CA Sakchi Jain's insightful reel highlights the importance of understanding the difference between composition and the regular GST scheme on restaurant bills. By educating consumers about their rights and the government's regulations, she allows individuals to take action against any disparities they encounter.