Q. inter-state transactions for composite scheme dealer

Question

Sir,

A registered composite scheme dealer year :2019-20 sale of goods turnover for intra-state rs:12 lacs and sale of inter-state goods turnover rs:3 lacs .if dealer composite tax pay rs:12+3 total rs:15 lacs tax pay on 1% show in cmp-08 return.gst department notice received f.y. 19-20 inter-state transactions not eligible notice mentioned

dealer sale turnover for intra state rs:12 lacs sale turnover  for inter-state rs:3 lacs total tax rate 5% applicable and already 1 % rate tax paid remaining balance rs:4 % tax payble show in notice.

Doubt:

1.Dealer inter-state and intra-state both  remaining tax rate 4 %  pay compulsory .

Answer 1

For the FY 2019-20: You mentioned that the dealer has made intra-state sales of Rs. 12 lakhs and inter-state sales of Rs. 3 lakhs. Under the Composition Scheme, the dealer is not eligible to make inter-state sales. Therefore, the notice from the GST department stating that inter-state transactions are not eligible under the Composition Scheme is in line with the GST law.

Tax Rate Issue: The composition scheme typically allows for a lower tax rate (e.g., 1% for traders). However, since inter-state sales are not allowed under this scheme, such sales would be subject to the regular GST rates applicable to the goods sold. The notice suggests a 5% tax rate is applicable to your total turnover, including both intra-state and inter-state sales, which indicates a shift from the composition scheme to the regular GST scheme for the inter-state portion of the sales.

Regards, CA. Praveen Sharma

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