Goods and Services Tax – GST – By: – Piyush Jain – Dated:- 13-1-2018 Last Replied Date:- 31-1-2018 – A. Who can opt for Composition Scheme? Businesses with annual turnover upto ₹ 1.5 crore* can opt for composition scheme. Turnover of all businesses with same PAN has to be added up to calculate turnover for the purpose of composition scheme. Only Manufacturers of goods, Dealers, and Restaurants (not serving alcohol) can opt for composition scheme. B. What is the tax rate applicable to a Composition Dealer? Please use the chart below to understand the tax rate on turnover applicable: C. Is liability to pay taxes under Reverse Charge Mechanism covered under the Composition Scheme? A Composition Dealer has to pay tax under Reverse Charge Mechanism wherever applicable. The rate applicable to the supplies is the rate at which GST has to be paid. This means that rate under composition scheme should not be used for reverse charge purposes. Also, no ITC is available for tax paid under re
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e Charge is applicable + Tax on B2B purchases from unregistered suppliers (July and August 2017) + Tax on Import of Services The rate of Tax on transactions under Reverse Charge, purchase from an unregistered dealer and import of services will be at normal rates, i.e. the rates applicable to the supplies. Rates under Composition Scheme are applicable only to sales of a composition dealer. G. Should a Composition Dealer maintain detailed records? No, a dealer registered under composition scheme is not required to maintain detailed records as required by a normal taxpayer. H. Can Composition Dealers avail Input Tax Credit? No, a Composition Dealer is not allowed to avail input tax credit of GST on purchases. I. Can a Composition Dealer issue Tax Invoices? A Composition Dealer has to issue Bill of Supply. They cannot issue a tax invoice. This is because the tax has to be paid by the dealer out of pocket. A Composition Dealer is not allowed to recover the GST from the customers. J. What ar
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of input in stock, or in semi-finished goods or in finished goods held on the day before the day of opting out of composition scheme. N. What are the conditions for availing input credit on stock lying at the time of transition? Following are the conditions which must be addressed by the taxpayer to avail credit on input at the time of transition from composition scheme to the normal scheme: Inputs or goods will be used for making taxable supplies. The CENVAT Credit was eligible to be claimed in the previous regime, however, couldn t claim it being under composition scheme. ITC is eligible for availing under GST regime. The taxpayer has bills of input tax paid on such goods. Invoices should not be older than 1 year from 1st July 2017 (i.e. not dated before 1st July 2016) O. What is the treatment for input credit availed when transitioning from normal scheme to Composition Scheme? When switching from normal scheme to composition scheme, the taxpayer shall be liable to pay an amount equa
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sition scheme anytime during the year? No. Before the beginning of every financial year, a registered taxpayer is required to provide a declaration on the GST Portal. This cannot be done anytime during the year. T. What will happen if I opt out of composition scheme mid-year? When a dealer opts out of composition scheme all the normal rules are applicable from the day of opting out. For example, a composition dealer opts out of composition scheme on 15th October 2017. This means that the dealer will have to file two GSTR-4 for the quarters July – September, and October (15 days). The dealer will also have to file GSTR-1, GSTR-2, and GSTR-3 for the period of October 2017 (sales from 15th October until end of the month). Piyush Jain & Co. (Company Secretaries) Email: cs.pj2016@gmail.com, pjnco2016@gmail.com – Reply By Bharat Kapoor – The Reply = Chart is missing in FAQ B. – Reply By Piyush Jain – The Reply = Manufacturer and Traders – 0.50% as CGST & SGST each = 1% as total .. R
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