Queries regarding the margin scheme of GST

Hello, Hope Everyone is doing well.

We are a firm dealing in second hand goods like shoes and clothing, and we fall under margin scheme of GST.

I have a few questions related to that -

1) While calculating the purchase price do we include Product cost + adverstisement costs + shipping costs which are added in order to sell the product ?

2) My accountant filed GSTR-1 AND GSTR-3B as nil last month, as the margin was negative. Even tho we had sales worth 23L and purchases were coming round about 26L. But we filed GSTR-1 AND GSTR-3B as nil. Is this correct ? If not then how can we show the negative margin and no gst liability.

3) Can we claim ITC on advertisement expenses and shipping costs while including them as part of the purchase ?

I'll address each of your questions related to the margin scheme of GST: 1. Calculating Purchase Price - *Product Cost*: Yes, include the product cost in the purchase price. - *Advertisement Costs*: No, advertisement costs are not included in the purchase price. They are considered as selling expenses. - *Shipping Costs*: No, shipping costs are not included in the purchase price. They are considered as selling expenses. 2. Filing GSTR-1 and GSTR-3B with Negative Margin - *Correctness*: No, filing GSTR-1 and GSTR-3B as nil is not correct. You should report the sales and purchases in the returns, even if the margin is negative. - *Reporting Negative Margin*: You can report the negative margin in the GSTR-1 and GSTR-3B returns. In the GSTR-1, report the sales and purchases in the respective tables. In the GSTR-3B, report the negative margin in the table for computation of taxable value. 3. Claiming ITC on Advertisement and Shipping Expenses - *ITC Eligibility*: No, you cannot claim ITC on advertisement and shipping expenses as they are not part of the purchase price. - *Alternative*: You can claim ITC on these expenses as business expenses in the GSTR-3B return, subject to the conditions and restrictions under the GST Act.