Composition Levy

Good Evening,

We have client who is currently registered in DVAT under normal scheme (dealing in inter-state purchases and intra-state sales), however, purchases were not through C-Form and VAT was paid @ 5%.

Now since his turnover is around Rs. 40L, he wants to opt for Composition scheme under GST, as under Sec 10 of CGST act, no restriction is there on inter-state purchases.

However, he is having stock in hand of around Rs. 20L (inter-state purchases). But as per Rule 3(1)(b) of Composition Rules, goods held on appinted date cannot be that from inter-state purchases.

If the inter-state purchases are not restricted under Composition scheme in GST, what is the logic of such restriction under Rule 3(1)(b).

Kindly clarify.