Cancelled of gst no under composition

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ketan (Querist)
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23 May 2019 I have GST NO under Composition. i have a provision store and paid 1 % GST quarterly. my yearly turnover is near 10-12 Lakhs. now GST limit is 40 Lakh, than can i cancelled or surrender my GST no ?

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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23 May 2019 You can apply for cancellation of GSTIN as your turnover is below 40 lakh. But before closure you have to pay tax on your stock.

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CA Altamush Zafar

CA Altamush Zafar (Expert)
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24 May 2019 You can cancel your registration. Since you are under composition no ITC was allowed therefore nothing is to be paid or reversed

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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24 May 2019 (5) Every registered person whose registration is cancelled shall pay an amount, by

way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit

of input tax in respect of inputs held in stock and inputs contained in semi-finished or

finished goods held in stock or capital goods or plant and machinery on the day immediately

preceding the date of such cancellation or the output tax payable on such goods, whichever

is higher, calculated in such manner as may be prescribed:

Provided that in case of capital goods or plant and machinery, the taxable person shall

pay an amount equal to the input tax credit taken on the said capital goods or plant and

machinery, reduced by such percentage points as may be prescribed or the tax on the

transaction value of such capital goods or plant and machinery under section 15, whichever

is higher.

CA Altamush Zafar

CA Altamush Zafar (Expert)
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24 May 2019 But since he is in composition scheme he hasn't taken any input credits therefore no payment need to be made

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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24 May 2019 Understand the wordings , ITC availed on stock or output tax payable whichever is higher.
So, here 1% required to be be paid on closing stock

CA Altamush Zafar

CA Altamush Zafar (Expert)
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24 May 2019 As far as my understanding goes GST is payable only on supplies. The concept of reversal of credits on cancellation is that he seller will now sell his goods without GST that is the reason ITC needs to be reversed or paid as per the balance available.
As far as output tax payable is concerned, output tax clearly means tax on supply of goods or service. Since the stock is still available with the supplier and has not been supplied yet there will be no output tax.
I could be wrong but definition of output tax is not tandem with tax on stock. Moreover I cannot see the intention behind taxing stock in hand.
Can you explain the intention behind the same?

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