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Composition Scheme

Nayeemulla S H (Accountant) (57 Points)

06 November 2019

Sir/Madam

One of my client want to convert regular scheme to Composition scheme under GST. They are the sub-dealer of two wheeler s and there turnover for the Previous Financial Years is upto 25 Lakhs and they also made sales of Spares relating to Two Wheeler so kindly suggest me can i do it.

If i convert then what would be the GST Laws implies on this. Please let us know.

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8 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 06 November 2019

You can change from next financial year only, provided total sales is intrastate.... (but not now)

1 Like

Nayeemulla S H (Accountant) (57 Points)
Replied 07 November 2019

My question is that they are like commission agents i.e., they got commission for the sale of bikes its related to service for this can we convert regular into composition?

Nayeemulla S H (Accountant) (57 Points)
Replied 07 November 2019

Sir/Madam

I need information about C & F agents accounting process Once i received monthly statement from suppliers they mention Discounts like Cash Discount, TGT, AGT, AI as well Freight charges and also we raise the expenses invoices relating to expenses we made on the behalf of company like office expenses, godown rent, computer operator salary. and also they give non trading transport charges, but am really confused how to records these in books of accounts as they deducting these amounts in their sales invoices. I wanted to know that weather these are all comes under assets side or to the indirect expenses. If it comes to assets side then should i reverse the entry again or what please let me know.

Please explain me with entries in the books of accounts (Tally ERP9)

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 November 2019

Thanks sir but as per you said we can only purchase made from Intrastate i.e., with in state and we cannot claim input that's your point right sir and we have to do file quarterly basis and for TO we need to calculate 1% is it correct sir.

My question is that they are like commission agents i.e., they got commission for the sale of bikes its related to service for this can we convert regular into composition?

FIRST OF ALL THE PURCHASE IS NOT RESTRICTED TO INTRASTATE; ITS ONLY OUTWARD SALES MUST BE INTRASTATE.

SECONDLY IF ONLY COMMISSION AGENT, THEN THE SCHEME NOT APPLICABLE, BUT THEY MUST BE RAISING TOTAL AMOUNT TAX INVOICE DIRECTLY TO THE CUSTOMER, AGAINST THAT MUST BE RECEIVING THE SAME FROM DISTRIBUTOR. IF THAT BE THE CASE THEN THEY CAN OPT FOR THE SCHEME.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 November 2019

For your second query, please clarify each entry with your Principal; as some of them directly reimbursed by their client is debited to client's account, and the one which is expended for own business are debited to direct expenses heads. Nothing as such from assets side. So each expense will be treated as per its criteria, which cannot be explained in short.

Nayeemulla S H (Accountant) (57 Points)
Replied 11 November 2019

SECONDLY IF ONLY COMMISSION AGENT, THEN THE SCHEME NOT APPLICABLE, BUT THEY MUST BE RAISING TOTAL AMOUNT TAX INVOICE DIRECTLY TO THE CUSTOMER, AGAINST THAT MUST BE RECEIVING THE SAME FROM DISTRIBUTOR. IF THAT BE THE CASE THEN THEY CAN OPT FOR THE SCHEME.

Sir as our client is sub dealer of two wheeler's and they will get commission on sale of two wheeler's and they also used to sales spares parts of two wheeler. But as you said about raising Invoices for their customer, directly Head office will raise Invoice on behalf of our client to their customer they just collect the amount from customer and transfer to head office account by bank.

Sir take example

ABC is Head Office and XYZ is Sub-dealer

if XYZ made sales of Vehicle then they cannot made any invoice to their customer but ABC will generate Invoice of XYZ customer for this XYZ will get commission.

If XYZ made any sales of Spares then they made invoices for their customer and also for Labour Charges.

Nayeemulla S H (Accountant) (57 Points)
Replied 11 November 2019

Sir,

As company reimbursing all expenses made by our client in their Ledger statement. For this how would i record entries in books i.e., tally. Should i rise any Invoice to those expenses made on behalf of Company if yes then how because these are all expenses i.e., Office Exp, Transportation, Courier, Rent, Salary like this