Registration of small mfg. unit in gst regime

This query is : Resolved

Harjinder Atkar (Querist)
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25 September 2016 Govt. has announced 20 Lakhs threshhold Limit for registration in GST regime. My query is that if a small Mfg. Unit with sale of Rs. 10 Lakh per year. he will Purchase Raw Material minimum of Rs 7 Lakh for sale of 10 Lakh, If GST rate is 20% then He will pay Rs. 1.4 Lakh as GST on Purchases of Rs. 7 Lakh. If the Mfg. Unit not Regd. under GST then his cost will Increase and he will face problem in selling his goods at higher rate to Regd. dealer becouse ITC will not be Available to Regd. dealer. I wanted to Know that small Mfg. unit should Register in GST regime to reduce his cost ?

Chandrasekhar Yaragani

Chandrasekhar Yaragani (Expert)
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20 October 2016 He can go for voluntary registration. Assuming suppliers show their sales in GSTR1 he can take credit smoothly in GSTR2. More over if he goes for voluntary registration he can also take credit of taxes on closing stock, if the stock was purchased within one year before the date of transition and he is not registered currently.