GST composition

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The GST composition scheme threshold has been raised from 1 crore to 1.5 crore, effective from February 1st, 2019. However, for the financial year 2018-19, the applicable limit remained 1 crore. This means sales exceeding 1 crore during that period are subject to full GST, even if the amendment was enacted mid-year. The higher limit of 1.5 crore is applicable from April 1st, 2019, for the 2019-20 financial year.

Guest

Guest (Querist)

21 September 2020 CGST Act has been amended as per notification 02/2019 raising the threshold of a composition dealer from 1 crore to 1.5 crore w.e.f 01.02.2019. Does this mean a composition dealer can sell upto 1.5 crore during 2018-19 financial year? My client's sales exceeded 1 crore during March 2019. Is he safe by virtue of this act amendment which would have its effect from 01.02.2019? An assessing authority is of the opinion this change would take effect from 01.04.2019 only. I am in a dilemma on this issue. Please help me out.

Lekhraj sood

Lekhraj sood (Expert)
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21 September 2020 Please refer Notification No. 14/2019 – Central Tax ,New Delhi, the 7th March, 2019.The limit of 1.5 crores is applicable from 1.4.2019. So you can only opt for 2019-20 if your turnover was less than 1.5 crores in 2018-19.In your case, for 2018-19 the limit applicable was Rs. 1.00 crore only. So you may have to pay full tax for the amount exceeding 1 crore.

Guest

Guest (Querist)

21 September 2020 I fully understand sir. Thanks heaps for the patience for answering me. No more doubts on this. My composition status for 2019-20 is intact and I have to pay the differential gst on the sales exceeding one crore for 2018-19 FY.

Thanks again sir. Forward successfully 🙏

Lekhraj sood

Lekhraj sood (Expert)
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21 September 2020 you are always welcome.

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