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GST registration for Hardware retail business

Vivek (Prporietor) (56 Points)

08 August 2020

Started Hardaware retail business

Which catagory is appropriate for me regular or composition tax payer

Thanks

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10 Replies

Mudit Agarwal (73 Points)
Replied 08 August 2020

First decide your turnover.. If its more then 25lac then regular otherwise composition... Because gst on hardware is 18%.

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 08 August 2020

@ Mudit ji
How this limit of 25 Lakhs....??

Mudit Agarwal (73 Points)
Replied 08 August 2020

This is not any limit... Just for a calculation for getting benefits of taxes... Between regular or composition... Just a mind making.. To pay taxes from pocket profit..

Vivek (Prporietor) (56 Points)
Replied 08 August 2020

Thanks

Can I switch regular to composition scheme

Just got the GST no on regular tax payer

Chahat Bansal (226 Points)
Replied 08 August 2020

Yes, you can switch to composition scheme but you have to forego all the ITC standing in credit ledger.

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CA. Heet Shah (Tax Consultant & Practitioner) (6174 Points)
Replied 09 August 2020

Originally posted by : Vivek
	Thanks Can I switch regular to composition scheme Just got the GST no on regular tax payer

Composition scheme needs to be availed prior to application incase of new registration or prior to Financial year by intmating the dept.

CA. Heet Shah (Tax Consultant & Practitioner) (6174 Points)
Replied 09 August 2020

Composition scheme cannot be availed once opted out for regular scheme during a FY.

CA. Heet Shah (Tax Consultant & Practitioner) (6174 Points)
Replied 09 August 2020

No Question of ITC claim arises incase of composition dealer anyway

Hemanth Ranka (10 Points)
Replied 09 August 2020

Yes once your application is approved as a regular tax payers on new registration you cannot opt for composition scheme during the rest of the financial year until any relaxation is announced by the government.

CA PARTH SHAH (In Practice) (1951 Points)
Replied 10 August 2020

Hi Vivek,

Since you have already registered your business under regular scheme, you will not be able to opt for the composition scheme for FY 20-21. So till march 2021, you should consider few points in order to decide whether to continue under regular scheme or opt composition scheme.

1) Whether you are able to maintain proper stock records?

2) Whether you are able to do book keeping on regular monthly basis?

3) Whether you are selling goods pan India ?

if the answers are affirmative, then you should continue under regular scheme only.

You will be surprised to find that if your business require substantial amount of stock , then you might not have to pay gst in cash at all or icash payment of gst will be very small amount.

Composition scheme will restrict your business to your state only.

So regular scheme is always beneficiary in most of the case.

But if you want to get rid of monthly compliance and simply pay tax on your sales amount then composition scheme will be a good option for you.

I can provide you proper analysis based on your financial projection for FY 20-21 and calculate your cash outflow for the year under both the schemes. You can contact us caparth @ parthdshah.com