My neighbour owns a general stores(provision stores kirana stores) shop and doesn't maintain any sales record .He only maintains purchase bills.
So what he does is he adds10/8% margin on purchase value and compute rate wise sales and accordingly pay GST
As if purchases made during a month are sold during that month itself
i.e. GST calculations are made under an assumption(due to lack of records) of zero inventory at the end of the day.
My question is
NOW he wants to opt for composition scheme and as per the act he has to reverse ITC taken on inputs held in stock on the day prior to switching to composition scheme.
But per our GST calculations all sales are made out of current stock i.e. one which is acquired on or after 1st April 2020. So he should not be liable for ITC reversal
Please help
CAclubindia
