Question

A trader opts for the Composition Scheme to simplify their compliance. What is the primary disadvantage regarding their purchases? 

A They have to pay a 10% penalty on all purchases.
B They cannot claim Input Tax Credit (ITC) on any goods or services purchased.
C They can only claim ITC on capital goods, not raw materials.
D They can only claim ITC if their supplier is also in the Composition Scheme.
E They must pay tax on purchases at a flat 40% rate.
Practice Next

Hey! Ask a query

🎓
Think You're Ready for RBI Grade B?
RBI Grade B 2026 Phase 1 Memory Based Paper
  • 200 Questions with Detailed Solutions
  • Section-wise Coverage (GA, English, Quant & Reasoning)