Q. tax applicable rate inter-state transaction for composite scheme dealer

Question

sir,

A registered composite scheme dealer sales transactions two types

1. Outward suppliers for intra -state transaction value e-way biils year 2019-20 Rs. 12 lacs tax payment 1 percentage
2. Outward supply for inter-state transaction value e-way biils Rs. 3 lacs year 2019-20 tax payment 1 percentage.

If  state gst department notice issued sec 10(2)(c) outward supply transaction not eligible for inter-state transaction

Tax applicable on Rs. 12 lacs + Rs. 3 lacs total Rs. 15 lacs turnover tax payment 5 percentage calculation 1 percentage tax payment already remaining balance 4 percentage tax payable demand raised in notice mentioned.

Doubt:

Tax pay on remaining balance tax inter-state and intra -state both applicable or inter-state only applicable.

Answer 1

The dealer is registered under the composition scheme and has made both intra-state and inter-state outward supplies.

The intra-state transactions amounted to Rs. 12 lakhs, and the inter-state transactions amounted to Rs. 3 lakhs for the financial year 2019-20.

The tax department has issued a notice under Section 10(2)(c) of the CGST Act, 2017, stating that the dealer was not eligible to make inter-state outward supplies under the composition scheme.

The dealer is now liable to pay the difference between the tax already paid under the composition scheme (1%) and the tax due under the normal GST provisions (5%) on the total turnover of Rs. 15 lakhs. This results in an additional tax liability calculated at 4% of Rs. 15 lakhs.

Regards, CA. Praveen Sharma

www.linkedin.com/in/capraveensh