Few points to consider while deciding on Composition Scheme (apart from filing frequency and absence of credit) :
1. GST rates for your products and your margin: if you are dealing primarily in 12%, 18% and 28% items, you might save tax by paying Composition tax @1% on sale instead of full rate on value addition. If you are dealing in 5% GST items, composition at 1% of sale value may be costlier.
2. Tax on exempted item: Person under Composition will pay 1% on exempt items also. If you are selling both taxable and exempt items, you should estimate total impact.
3. Reverse Charge: Registered persons have to pay tax under reverse charge on all inwards (whether goods, expenses, assets) from unregistered supplier. There is no relief to Composition dealer from reverse charge. Further, since you can't claim credit for the same, it is an extra cost to you.
4. Restriction on interstate supply.
5. No relief in draft e-way bill rules.
6. Pay GST on opening stock from unregistered persons.
-CA. Sandeep Choudhary
9433359031/9564320249
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