Cancelled of gst no under composition
This query is : Open
23 May 2019
I have GST NO under Composition. i have a provision store and paid 1 % GST quarterly. my yearly turnover is near 10-12 Lakhs. now GST limit is 40 Lakh, than can i cancelled or surrender my GST no ?
23 May 2019
You can apply for cancellation of GSTIN as your turnover is below 40 lakh.
But before closure you have to pay tax on your stock.
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24 May 2019
You can cancel your registration. Since you are under composition no ITC was allowed therefore nothing is to be paid or reversed
24 May 2019
(5) Every registered person whose registration is cancelled shall pay an amount, by
way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit
of input tax in respect of inputs held in stock and inputs contained in semi-finished or
finished goods held in stock or capital goods or plant and machinery on the day immediately
preceding the date of such cancellation or the output tax payable on such goods, whichever
is higher, calculated in such manner as may be prescribed:
Provided that in case of capital goods or plant and machinery, the taxable person shall
pay an amount equal to the input tax credit taken on the said capital goods or plant and
machinery, reduced by such percentage points as may be prescribed or the tax on the
transaction value of such capital goods or plant and machinery under section 15, whichever
is higher.
way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit
of input tax in respect of inputs held in stock and inputs contained in semi-finished or
finished goods held in stock or capital goods or plant and machinery on the day immediately
preceding the date of such cancellation or the output tax payable on such goods, whichever
is higher, calculated in such manner as may be prescribed:
Provided that in case of capital goods or plant and machinery, the taxable person shall
pay an amount equal to the input tax credit taken on the said capital goods or plant and
machinery, reduced by such percentage points as may be prescribed or the tax on the
transaction value of such capital goods or plant and machinery under section 15, whichever
is higher.
24 May 2019
But since he is in composition scheme he hasn't taken any input credits therefore no payment need to be made
24 May 2019
Understand the wordings , ITC availed on stock or output tax payable whichever is higher.
So, here 1% required to be be paid on closing stock
So, here 1% required to be be paid on closing stock
24 May 2019
As far as my understanding goes GST is payable only on supplies. The concept of reversal of credits on cancellation is that he seller will now sell his goods without GST that is the reason ITC needs to be reversed or paid as per the balance available.
As far as output tax payable is concerned, output tax clearly means tax on supply of goods or service. Since the stock is still available with the supplier and has not been supplied yet there will be no output tax.
I could be wrong but definition of output tax is not tandem with tax on stock. Moreover I cannot see the intention behind taxing stock in hand.
Can you explain the intention behind the same?
As far as output tax payable is concerned, output tax clearly means tax on supply of goods or service. Since the stock is still available with the supplier and has not been supplied yet there will be no output tax.
I could be wrong but definition of output tax is not tandem with tax on stock. Moreover I cannot see the intention behind taxing stock in hand.
Can you explain the intention behind the same?
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