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Regular GOODS AND RESTAURANT

MURALIDOSS (INCOME TAX PRACTITIONER) (1328 Points)

23 February 2024

SIR,

A PERSON START A BUSINESS FOR GOODS SALES MONTHLY 2 LAKHS TURNOVER HIS SALES AFTER ADJUSTMENT OF ITC PAID OR NIL,

NOW HE STARTS RESTAURANT HE WANTS TO PAY TAX 5% NON CLAIMED ITC .

HOW TO DO IN GST RETURN?

PLEASE

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5 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 23 February 2024

Better to move the business with another registration (vertical).

1 Like

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MURALIDOSS (INCOME TAX PRACTITIONER) (1328 Points)
Replied 24 February 2024

Sir,

Can I change the scheme to composition and pay 5% tax for restaurant? Goods need to change or drop can?

Money Money (413 Points)
Replied 24 February 2024

The GST composition scheme is a simplified tax regime for small businesses, especially restaurants, that allows them to pay a fixed rate of tax on their turnover instead of the regular GST rates. However, there are certain conditions and limitations for opting for this scheme. 1

One of the conditions is that the composition scheme is only available for intra-state supply of goods and services. This means that if you have any inter-state transactions, you cannot opt for this scheme. Another condition is that you cannot supply goods through an e-commerce platform, such as Amazon or Flipkart. 2

If you are eligible and want to change from the regular scheme to the composition scheme, you can do so by filing a declaration in Form GST CMP-02 on the GST portal before the beginning of the financial year. You also need to file a statement in Form ITC-03 to declare the details of the input tax credit that you have to reverse on your closing stock. 3

The GST rate for restaurants under the composition scheme is 5% (2.5% CGST and 2.5% SGST) of the turnover. This rate applies to both food and non-alcoholic beverages. However, you cannot charge GST from your customers or claim any input tax credit on your purchases. You also need to file a quarterly return in Form GST CMP-08 and an annual return in Form GSTR-4. 4

If you change to the composition scheme, you do not need to change or drop your goods, as long as they are taxable under GST and not exempt or zero-rated. However, you need to ensure that you comply with the conditions and restrictions of the scheme and pay the tax accordingly. 5