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Vat dealer to gst composition dealer

25 June 2017

I am a vat dealer under current law... I have Regd. As composition dealer in gst.... I have a opening stock of 2 lakhs as on 1.7.2017. I have already taken the credit of vat paid against its purchase... In transition has that vat to be reversed now...

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11 Replies

NITIN KOTAK (SERVICE) (1465 Points)
Replied 25 June 2017

please clear for what you paid the tax than i clear the issue

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 25 June 2017

Switching from normal scheme to composition scheme, taxpayer shall be liable to pay an amount equal to the credit of input tax in respect of inputs held in stock on the day immediately preceding the date of such switch over. The balance of input tax credit after payment of such amount, if any lying in the credit ledger shall lapse.

vipul mittal (85 Points)
Replied 25 June 2017

Could u please quote where this is mentioned... Gst or vat or transition ruled... Client needs reference

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 25 June 2017

https://cleartax.in/s/gst-composition-scheme-transition/

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 25 June 2017

Refer Sec 18(4) of CGST Act for more clarification.

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vipul mittal (85 Points)
Replied 26 June 2017

I read it mam... It talks about Regd. Person under GST, if he opts for composition scheme... And not for VAT dealer to composition scheme under GST..... .

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 26 June 2017

Sec 18(4) states that

Where any registered person who has availed of input tax credit opts to pay tax under section 10 or, where the goods or services or both supplied by him become wholly exempt, he 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 and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case may be, the date of such exemption:

Provided that after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

vipul mittal (85 Points)
Replied 26 June 2017

Mam this is for dealer Regd. Under GST and opting for composition thereafter on a future date... And not for a vat dealer transitioning to composition scheme under GST...