GST Scheme

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Till now i m unregistered dealer of redaymade garments.Now My turnover has been exceeded 20lakh. please suggest  which scheme must be opt by me. In my opinion Normal scheme is better than composition scheme,as in normal scheme  we collect GST on goods from customer and paid it to Govt but in composition scheme we paid GST @1%  to govt out of our pocket. Please correct me if i m wrong.

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GST - Traders Deepak Arora 1 year 4 Answers 97 views 0

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  1. taxclinic_team700

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    Yes you are correct, in composition scheme you should pay composite tax from your pocket. you cannot charged composite tax from customers and in other case, if you have register under as a normal taxpayer you should get the benefit of ITC.

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      Sir ,then why govt are saying that composition scheme give benefit to small dealer.but  in such scheme we have to pay tax from our pocket.but in normal scheme we charge gst from customer and paid it to govt.it means i should opt for normal scheme as in suh scheme i dont have to pay gst from my pocket.

      • taxclinic_team700

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        for better understanding the concept see our article click here

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          Dear sir,

          Please find the attached sheet of modified example on GST Scheme

          sir i have modified your example on comparison between normal scheme and composition scheme.i have taken profit @20% on cost.in such modified case profit will be lessor in composition scheme than the normal scheme.

          but in your example profit in composition scheme is higher than normal scheme. Reasaon:- you have taken profit @ 42.85% on cost.

          As per my analysis if we charge higher profit on cost only than composition scheme is better than normal scheme.because if we charge profit on cost @20%, profit will be lessor in composition scheme and if charge profit @42.82%, profit will be more in composition scheme.

           

          there we can not take decision on the bases of your example whether to opt for composition scheme or normal scheme.

          Conclusion:- jaise jaise hum profit on cost jyada charges karte h ,profit in composition will also increase.

           

          thanku


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