Composition rate and stock difference

One of cleint has registered as COT dealer

Today his shop inspected by state vigilance officers

Stock difference found 400000

Now what will be the tax payable
Is it 1% or regular rate??

any circular or order
Replies (2)
Quick Summary
A client registered as a COT dealer faced an inspection where a stock difference of £400,000 was identified. The key question is whether the 1% composition tax rate applies to this difference or if regular tax rates are applicable. If annual sales are below £1.5 crore, the composition scheme is an option, but inter-state supplies are excluded. The stock difference itself is subject to tax, with the rate depending on the applicable scheme.

 

If your client's annual sales are less than Rs 1.5 crore, they can opt for the composition scheme and pay 1% tax on their turnover ¹.

However, if their sales exceed Rs 1.5 crore, they will have to pay the regular tax rate applicable to their business category 

 Since the stock difference found is Rs 400000, the tax payable would be 1% of this amount, which is Rs 4000 ¹

. However, please note that the composition scheme is not applicable for businesses that make inter-state supplies.

 

Composition rate and stock are different

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