Composition_Comparision_GST Vs. UP VAT

Comparison of Provision Regarding Composition Scheme under Current U.P VAT Act,2008 VS Model GST Regime

S.No.

Basis

Under UP Act' 2008

Model GST Law

For Works Contractor

For Others

1

Governing Section

Section-6-Composition of tax liability

Section-9-Composition Levy

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2

Eligibility

Any Person fulfilling T/o criteria (other than person engaged in Works Contract i.e. on works contractor no T/o Limit is applicable)

Person fulfilling T/O limit other than
1. Engaged in supply of services
2. Person engaged in interstate supply
3. Person making Non-Taxable Supply
4. E-Commerce Operator
5. All the taxable person has common PAN shall opt the scheme simultaneously
Spl. Point: T/o Limit Applicable in case of Work Contractor unlike in UP VAT Act.

Under Current UP VAT: Eligible (No T/o Limit)
Under GST: Eligible (Subject to T/o Limit)

Under Current UP VAT: Eligible (Subject to T/o Limit)
Under GST: Eligible (Subject to T/o Limit)

3

Turnover Criteria

Current Year T/o-50 lakhs or less
Previous Year T/o-50 lakhs or less

Current Year T/o-50 lakhs or less

T/o limit need to be complied with

4

ITC

Cannot avail and utilize ITC of the tax paid at the time of purchase

Cannot avail and utilize ITC of the tax paid at the time of receiving supply

Taxes on Input side would become part of cost

5

Tax Invoice

Cannot issue Tax invoice and pass on the credit of tax nor charge the same from customer in the invoice, it is paid on T/o of the assessee at fixed rate which form part of cost.

Cannot issue Tax invoice and pass on the credit of tax nor charge the same from customer in the invoice, it is paid on T/o of the assessee at fixed rate which form part of cost.

No tax invoice need to be issued, Ease in compliance of the same

6

Rate of Tax

1 %
[Notification No : KA.NI-2-251/XI-9(2)/08-U.P.Ordi.-37-2008-Order-(5)-2008 Dated 4th February, 2008]

For Manufacturer-2.50% (Min.)
Others-1% (Min.)
[Not less than 2.5%/1% as per Section-9 actual rate still to be specified]

Actual rate still to be notified but an floor rate being specified in the section itself

7

Penal Provision

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If assessee not falling in the above Scheme and opts for the same the proper officer may after giving opportunity of being heard recover tax, interest and penalty of equal amount [As per Section 9(4)]thereon as recovery under GST

Officer may after applying principles of Natural Justice initiate penal action as specified

8

TRANSITIONAL PROVISIONS

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8.1. Assessee shifting from Normal Tax Regime under Earlier law to Composition Scheme under GST

N.A

Allowed but the ITC of stock lying in the stock shall be paid by him before switching in composition scheme in GST

May apply if opted for composition scheme in GST Law

8.2. Assessee shifting from Composition Scheme under Earlier law to Normal Tax Regime under GST

N.A

Allowed and the ITC of stock(incl. input, semi-finished goods, and finished goods) lying in the stock shall be allowed to be booked and utilize under GST regime subject to condition specified in  GST Model Law

May apply if opted for composition scheme in Earlier Law

9

Others

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Spl. Points:
1. Optional Scheme
2. Only for small assessee subject to T/o
3. Available to both trader and Service provider
4. Can pay tax on Quarterly basis
5. Relaxation in filling of Outward and Inward supply return
6. No Need to file Annual Return

Can opt if Beneficial but giving regards to the cost benefit analysis and compliance difficulties that may be faced by the organization while going in normal tax regime