stock declere in cmp3
This query is : Resolved
02 August 2017
please reply this query
what will be tax treatment on closing stock that we will declere in cmp 3
if we have no itc acording existing vat law
we have only stock
i mean we have consume all itc of vat law and have only closing stock on apointed date of gst
and we migrate in gst as composition dealer
what will be tax treatment on closing stock that we will declere in cmp 3
if we have no itc acording existing vat law
we have only stock
i mean we have consume all itc of vat law and have only closing stock on apointed date of gst
and we migrate in gst as composition dealer
04 August 2017
The stock which you have may have excise duty. If the stock is directly purchased from the manufacturer, ITC for excise duty can be claimed.
04 August 2017
MAM PLEASE READ ONCE AGAIN MY QUERY
I AM MIGRATE AS COMPOSITION DEALER NOT AS NORMAL DEALER
I WANT TO KNOW ABOUT RCM ON CLOSING STOCK
I AM MIGRATE AS COMPOSITION DEALER NOT AS NORMAL DEALER
I WANT TO KNOW ABOUT RCM ON CLOSING STOCK
04 August 2017
As a composite dealer you cannot taken ITC but for the old stock you are holding you can take credit for excise.
04 August 2017
MAM
IF I HAVE NOT ANY ITC IN LAST VAT RETURN
AND HAVING ONLY CLOSING STOCK
THAN WHAT WILL BE TAX LAIBILITY ?
IF I HAVE NOT ANY ITC IN LAST VAT RETURN
AND HAVING ONLY CLOSING STOCK
THAN WHAT WILL BE TAX LAIBILITY ?
25 July 2025
Got it! You’re migrating from VAT to GST as a **composition dealer**, have **no ITC balance** from VAT returns, but you hold **closing stock** on the appointed date.
Here’s the tax treatment under GST for such closing stock declared in CMP-03 (Migration Form):
---
### 1. **ITC on Closing Stock under Migration (CMP-03):**
* If you are **migrating as a composition dealer**, you **cannot claim ITC** on closing stock.
* However, **GST law allows you to pay tax on the value of your closing stock** as declared in CMP-03 and carry it forward as “ITC” to your new GST account.
---
### 2. **Tax Liability on Closing Stock:**
* Since you are migrating as a composition dealer, **you are not eligible for ITC** on inward supplies.
* But, on the appointed date of GST migration, the value of your closing stock will attract GST liability which **you must pay upfront**.
* The tax payable on closing stock is at the **rate applicable to those goods under GST** (usually CGST + SGST or IGST).
* This tax must be paid by you, even though you will later pay tax on outward supplies under the composition scheme at the prescribed lower rate.
---
### 3. **RCM on Closing Stock?**
* No **Reverse Charge Mechanism (RCM)** applies here on your closing stock.
* RCM is generally for specific services or goods notified under GST, not on stock migration.
---
### 4. **Summary:**
| Scenario | Tax Treatment |
| ----------------------------------- | --------------------------------------------------------------------------------------------- |
| Migrating as **composition dealer** | Cannot claim ITC on closing stock. Must pay GST on closing stock value as declared in CMP-03. |
| No ITC balance from VAT | No carry forward of VAT ITC. GST tax payable on closing stock value. |
| RCM on closing stock | Not applicable. |
---
If you don’t pay the GST on closing stock value during migration, the stock cannot be carried forward tax-free under GST.
---
**Tip:** Consult your tax advisor or check the latest GST notifications as rules may update. The GST portal also provides guidance on migration and CMP-03.
---
Need help with any specific values or filing steps?
Here’s the tax treatment under GST for such closing stock declared in CMP-03 (Migration Form):
---
### 1. **ITC on Closing Stock under Migration (CMP-03):**
* If you are **migrating as a composition dealer**, you **cannot claim ITC** on closing stock.
* However, **GST law allows you to pay tax on the value of your closing stock** as declared in CMP-03 and carry it forward as “ITC” to your new GST account.
---
### 2. **Tax Liability on Closing Stock:**
* Since you are migrating as a composition dealer, **you are not eligible for ITC** on inward supplies.
* But, on the appointed date of GST migration, the value of your closing stock will attract GST liability which **you must pay upfront**.
* The tax payable on closing stock is at the **rate applicable to those goods under GST** (usually CGST + SGST or IGST).
* This tax must be paid by you, even though you will later pay tax on outward supplies under the composition scheme at the prescribed lower rate.
---
### 3. **RCM on Closing Stock?**
* No **Reverse Charge Mechanism (RCM)** applies here on your closing stock.
* RCM is generally for specific services or goods notified under GST, not on stock migration.
---
### 4. **Summary:**
| Scenario | Tax Treatment |
| ----------------------------------- | --------------------------------------------------------------------------------------------- |
| Migrating as **composition dealer** | Cannot claim ITC on closing stock. Must pay GST on closing stock value as declared in CMP-03. |
| No ITC balance from VAT | No carry forward of VAT ITC. GST tax payable on closing stock value. |
| RCM on closing stock | Not applicable. |
---
If you don’t pay the GST on closing stock value during migration, the stock cannot be carried forward tax-free under GST.
---
**Tip:** Consult your tax advisor or check the latest GST notifications as rules may update. The GST portal also provides guidance on migration and CMP-03.
---
Need help with any specific values or filing steps?
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