as no time limit for denial of composition Scheme rule 6(4),.is regular tax without ITC is payable or there any method for ITC. ITC 01 is there for stock on date of denial but what about purchases made during the period under composition(now denied)
thanks in advance
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Denial of composition Scheme
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| Here are the common reasons for denial of Composition Scheme and the remedies available: 1. Common Reasons for Denial: - Making inter-state outward supplies: Composition dealers cannot make inter-state supplies (except for goods). If your business involves any inter-state sales, composition is not eligible - Supplying non-taxable goods: Certain goods (like alcohol for human consumption, petroleum products) cannot be supplied under composition scheme - Manufacturing notified goods: Ice cream, pan masala, tobacco products are excluded from composition - Registered under more than one state: Composition option must be exercised for ALL registrations — partial state-wise composition is not allowed - E-commerce operator: Businesses supplying through e-commerce operators (like Amazon/Flipkart) who are required to collect TCS cannot opt for composition - Service providers (above threshold): Service providers with turnover above Rs. 50 lakh cannot opt for composition (except restaurants) 2. Verification: Log in to GST portal → My Profile → Composition Status to check the exact reason for denial if shown in the system 3. Remedy — Appeal: - File an appeal before the Appellate Authority (Joint/Additional Commissioner) under Section 107 of CGST Act within 3 months of receiving the denial order - Attach: Explanation rebutting the ground of denial, supporting documents (turnover details, nature of supplies) 4. Reapplication: If denial was due to a correctable issue (e.g., wrong turnover declared), correct the underlying data and reapply during the next available opt-in window (typically available before 31st March for the following year) 5. Stay on Regular Scheme: While appeal is pending, continue under regular GST scheme and maintain all regular compliance to avoid any further non-compliance |
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