# Pan-Level Uniformity & Consequences

## (a) Uniform adoption — Proviso to Sec 10(2) and 10(2A)

All registered persons having the same PAN must opt for composition. If even one GSTIN opts for the normal scheme, none of the others can be on composition.

## (b) No collection of tax — Sec 10(4)

A composition supplier cannot collect tax from the recipient. Consequently:

He cannot issue a tax invoice — only bill of supply.
Recipient cannot claim ITC of any GST embedded in the price.

## (c) No ITC — Sec 10(4)

The composition dealer is outside the credit chain: he is not entitled to ITC on his inward supplies.

## (d) Penalty on irregular availment — Sec 10(5)

If a person paid tax under composition though he was not eligible:

He is liable to penalty.
Tax and penalty determined under Sec 73 / 74 / 74A of the CGST Act.

Worked example

### Example 1

Mr B has 3 GSTINs under PAN AAACX1234X — in Delhi, MP, UP. He wants composition only in MP. NOT permitted — either all three opt in, or none.

### Example 2

Composition trader X issues 'Tax Invoice' showing GST separately. This violates Sec 10(4). Recipient's ITC claim will be denied; X exposed to penalty.

### Example 3

Ineligible person opts and pays composition tax later detected: Tax under normal scheme + interest + Sec 73/74/74A penalty under Sec 10(5).

⚠️ Common exam mistakes

Allowing one GSTIN to opt and others to remain on normal scheme.
Issuing tax invoices and collecting GST from customers.
Claiming ITC on inward supplies under the mistaken belief that paying composition tax = entitlement to credit.

Reference: Section 10(2), 10(2A), 10(4), 10(5) — CGST Act, 2017

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Uniform Adoption across same PAN; No Tax Collection; No ITC; Penalty [Sec 10(2), (2A), (4), (5)]

Worked example

⚠️ Common exam mistakes