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GST Calculation under both the scheme

13 December 2019

I have one more doubt. For example I bought an item for Rs.100+18%gst. if I sold it with a margin of Rs.20, total 100+18+20=138. Under Regular & Composite schemes how much tax I have to pay. Kindly clarify

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prasad Nilugal ( GST Practitioner & Accounts ) (14167 Points)
Replied 13 December 2019

Its depend up on , what type of business you do ?. your turnover ?. Are you eligible for Composition Scheme or not ?.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 13 December 2019

Under Composition scheme also the sale value will be 138/- , but GST Rs.1.38/- @ 1% on turnover 138/- need to be deposit from your pocket. (Cannot collect tax from purchaser)

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NITYA LALITHA (23 Points)
Replied 13 December 2019

I am interested in wholesale business for FMCG goods, Fancy, Novelties Toys, Sport Items etc. While I am approaching some manufacturers and suppliers they are asking my GST Number. As I am beginner I can not expect my turnover. I need to apply for Registration. Before I apply I want to check which is good for me. Please help me to choose the best, Thankyou

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RAJA P M ("Do the Right Thing...!!!") (127167 Points)
Replied 13 December 2019

@ Nithya Lalitha.,

As per Your query...

For Composition You will pay Tax Rs. 1.38 for Rs. 138 (138*1%=1.38 (CGST 0.69 & SGST 0.69)

If it's regular scheme and supplies u serious 18% tax then want to pay for the value of (100+20(margin)=120*18%=21.6+120= 141.6). less input tax to output tax (21.6-18=3.16) and payable tax Rs 3.16.

Note : here composition You pay tax from Your pocket. But, in regular scheme You can collect from customers and pay to govt...

Shivam RC (Student) (23683 Points)
Replied 13 December 2019

Under the Composition Scheme, you cannot collect Output Tax from the Customers. You have to pay GST quarterly from your own pocket. If applied for Section 10 Registration ( i.e. Composition Scheme ) , then you have to pay GST @ Rs. 1.38 ( Turnover being Rs. 138 @ 1% for Traders ) from your own pocket.

The benefit of Regular Registration over Composition Scheme Registration is that you can claim ITC on your input, input services and capital goods and you can collect GST from the customers. The overall tax incidence reduces if there is a seamless flow of credit in the Economy.

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