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A composition supplier under Sec 10(1):
ACan collect tax from customers
BCannot collect tax from customers and cannot avail ITC
CCan avail ITC but cannot collect tax
DCan collect tax but not avail ITC
Answer & Solution
Correct answer: B. Cannot collect tax from customers and cannot avail ITC
1. Sec 10(4) prohibits a composition taxpayer from collecting any tax from the recipient of supplies.
2. It also bars the composition taxpayer from claiming any input tax credit.
3. Composition is a simplified scheme where output tax burden is borne by the supplier itself.
_Source: ICAI BoS CA Final Paper 8, Ch 3 "Levy and Collection of Tax", §Sec 10(4)_
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