Merely exercising option under composite scheme cannot prevent Revenue Department from demanding the recovery of GST

Last updated: 20 July 2021

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Quick Summary

The Andhra Pradesh High Court ruled that a business cannot avoid paying GST at regular rates, even if they initially opted for a composite scheme. The court found that the previous year's turnover under the VAT regime must be considered when determining eligibility for the composite scheme. Merely exercising an option and paying tax under it does not prevent tax authorities from demanding correct tax, interest, and penalties if the option was exercised incorrectly.

Court :
Andhra Pradesh High Court

Brief :
The Hon'ble Andhra Pradesh High Court in Godway Furnicrafts vs. the State of AP [Writ Petition No.10350 of 2020, dated November 11, 2020] confirmed the demand for recovery of Goods and Services Tax ("GST") by Revenue Department and held that merely because the assessee has exercised an option under the composite scheme and that it took time for the Revenue Authorities to verify the genuineness, it cannot prevent them from directing the assessee to pay tax, if the option exercised was found to be incorrect.

Citation :
Writ Petition No.10350 of 2020, dated November 11, 2020

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