LIVE GST Audit Course by CA Sachin Jain. Register Now!!

Composition scheme under gst

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

13 July 2017

Dear friends,

A Un-registered dealer under Old laws and GST Law wants to opt Composition Scheme in GST. He has some stock from Registered dealer (VAT charged) and Un-registered dealer.

Now if he opts for Composition levy,

(1) Is he also required to file any Transition form under Transition Rule?

(2) If he pays GST on URD Opening stock on RCM basis, where and in which FORM is he required to show that stock details and Tax paid details?

Please kindly suggest.

Reply
Follow
Share

7 Replies

Muthukkumaran (Consultant) (204 Points)
Replied 13 July 2017

1.Composition dealer cannot take credit of input taxes.So no filing required under transition rules.

2.GST applicable from 1st July only.So eventhough RCM applicable ,it doesnt apply on opening stock.Purchase from u n registered dealer after July 1st will attract RCM and a composition dealer is required to file quaterly returns.

1 Like

Jayesh Doshi (Self) (177 Points)
Replied 13 July 2017

A dealer trading in textiles which was tax free in vat regime having turnover more than 75 lakh during previous year i.e. 2016-17. Now he is applying for registration under GST, can he opt for composition as a new dealer ?
If yes then any liability on closing stock of textiles ?
Considering new registration whether condition of preceeding year turnover is applicable to such dealer ?
Please reply & clarify the issue.

Muthukkumaran (Consultant) (204 Points)
Replied 14 July 2017

Cannot opt for composition scheme as previous year turnover exceeds RS.75 lacks.Normal registartion required,pay gst on sale of such closing stock.

1 Like

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 15 July 2017

Originally posted by : Muthukkumaran
	1.Composition dealer cannot take credit of input taxes.So no filing required under transition rules. 2.GST applicable from 1st July only.So eventhough RCM applicable ,it doesnt apply on opening stock.Purchase from u n registered dealer after July 1st will attract RCM and a composition dealer is required to file quaterly returns.

As per Composition Rules - Rule 5 (1) The person exercising the option to pay tax under section 10 shall comply with the following conditions, namely:-

(c) the goods held in stock by him have not been purchased from an unregistered supplier and where purchased, he pays the tax under sub-section (4) of section 9.

It means he has to pay tax on Stock (if any from URD) available immediately before opting for Compopsition Scheme on RCM basis.

If he pays, where to show these details?

Please explain

Jayesh Doshi (Self) (177 Points)
Replied 15 July 2017

The dealer has to file Form CMP-3 within 60 days showing details of all RD & URD purchases. In this form he can show the payment details under RCM on urd purchases.

Jayesh Doshi (Self) (177 Points)
Replied 15 July 2017

Not purchases details of closing stock he has to show on Form CMP-03

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 15 July 2017

Originally posted by : Jayesh Doshi
	The dealer has to file Form CMP-3 within 60 days showing details of all RD & URD purchases. In this form he can show the payment details under RCM on urd purchases.

But CMP-03 is only for persons registered under the Existing Acts and migrating to Composition Scheme under GST.

I am talking about persons not regsitered under the Old Acts.