Finance Compliance Consultant
519 Points
Joined March 2026
Since the client is presently under composition and showing turnover of ₹84 lakh, but purchases are ₹3 crore, the case needs careful reconciliation. Composition eligibility is based on aggregate turnover, not purchases alone. However, purchases of ₹3 crore against turnover of ₹84 lakh may indicate suppressed sales, closing stock, or other mismatch. If actual aggregate turnover exceeds the prescribed composition limit, he must shift to the regular GST scheme from the date of crossing the limit and comply with regular GST provisions.
Please verify opening stock, closing stock, purchase returns, exempt/non-GST supplies, and actual sales. If there is no proper explanation for such high purchases, the department may question the turnover declared under composition.