What is more beneficial?

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35 Points Posted on 02 October 2020

Dear Experts,

                       What will be more profitable for a firm,gst regular scheme or composition,

Firm 

purchases from supplier Mrp Rs 1000 product at

Less 40 percent discount on mrp gross amount rs 600

plus gst18  rs 108

total cost of purchase rs708

if product sold by firm is  done at mrp1000 inclusive to customer 

the firm will make more profit in gst regular  scheme or in composition scheme?

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On 02 October 2020 at 17:46 Report
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Quick Summary
This discussion explores whether a firm would be more profitable under the GST regular scheme or the composition scheme. It analyses a scenario where a product is purchased at a discounted MRP and sold inclusive of GST. The calculations suggest that if the selling price is at MRP, the composition scheme appears more beneficial due to lower GST payable.

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Practice
1639 Points Posted on 02 October 2020
GST Regular is beneficial,
if opt for regular scheme
sale 1000
GST @ 18% 180
less: ITC 108
payable 72
if opt for composition
sale 1000
GST @ 1% 10
Plus: paid on purchase 108
paid 118
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On 02 October 2020 at 18:41
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35 Points Posted on 02 October 2020

Sir gst cannot be charged above mrp rs1000

rs1000 selling price is inclusive gst 18 percent 

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On 02 October 2020 at 18:57
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Practice
1639 Points Posted on 02 October 2020
Then also in that case in option 1 opt for regular scheme sale 847 Gst @ 18% 153 less ITC 108, GST Payable 45, in option 2 GST will be payable 118
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On 02 October 2020 at 19:01
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Tax and Business Consultant
5533 Points Posted on 04 October 2020
If you are charging MRP Rs. 1000 to your customers.( in normal as well as in Composition)

than composition is better.
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On 04 October 2020 at 11:46

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