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Composition levy - gst

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)

12 July 2017

Dear Friends and experts,

A Shopkeeper of Gifts Centre (Not registered earlier under the Old Laws) wants to NEWLY register for Composition Scheme. He has some stocks of gifts which have Invoices from Registered Dealer under Old Act (VAT) and stocks from unregisterd dealer also.

Now if he wants to register for Composition Scheme,

1. Is he required to mention details of these stocks in registration Application ?

2. Is he required to pay tax on these stocks from Un-registered Dealer on RCM basis?

Please kindly suggest.

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6 Replies

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 12 July 2017

The stock details are to be filled in GST TRAN-1

2 Like

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 12 July 2017

Originally posted by : saloni
	The stock details are to be filled in GST TRAN-1

But GST TRAN-1 is only for Registered person under the Existing Old Laws.

IN MY CASE - Dealer is not registered under Old Acts. Moreover, since he is opting for Composition Scheme, he is NOT able to claim Input credit if any available in those stocks. So I don't think he is required to give details of those stocks and file any return in that regard, such as GST TRAN-1.

Please suggest.

Rounak Varshney (Business) (276 Points)
Replied 12 July 2017

You are partially correct GST Tran-1 form is also for dealers who are not registered in old law but wants to register in GST.

But in your case as your opting for composition scheme, there is no need to file Tran-1 as you are not eligible to book ITC. Tran-1 form is for transfering the unutilised credit from old law to current regime. Thus in your case there is no need to give details of stock.

However you have to pay tax in RCM on the stock purchases from unregistered person at approriate rate of commodity, not 1%.

1 Like

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 12 July 2017

Originally posted by : Rounak Varshney
	You are partially correct GST Tran-1 form is also for dealers who are not registered in old law but wants to register in GST. But in your case as your opting for composition scheme, there is no need to file Tran-1 as you are not eligible to book ITC. Tran-1 form is for transfering the unutilised credit from old law to current regime. Thus in your case there is no need to give details of stock. However you have to pay tax in RCM on the stock purchases from unregistered person at approriate rate of commodity, not 1%.

Agreed Rounak.

But One more thing - If that person is paying Tax on Stock of Un-registered dealer on RCM basis, where is this detail required to be given? Becasue only after getting GSTIN , the dealer will be able to pay GST and file returns. Moreover, I have NOT seen any column in the Proposed forms regarding Disclosure of Such stock and payment of RCM on that.

Rounak Varshney (Business) (276 Points)
Replied 12 July 2017

You have to mention all the purchases from unregistered dealer in GSTR-4 on quarterly basis

1 Like

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 12 July 2017

Originally posted by : Rounak Varshney
	You have to mention all the purchases from unregistered dealer in GSTR-4 on quarterly basis

Agreed.

All details of URD Purchase in the particular Quarter (Say Jul-Sep 2017) are to be given in GSTR-4. But what about of URD Stock of June-2017 or before that?