Composite dealer have stock as on 01/07/2017

[Asked by Guest]

if dealer have opt composition scheme .

he have stock of ₹ 10 lakh(vat paid) as on appointed day of gst i.e is 01.07.2017. Does he have to pay gst on his closing stock of rs. 10 lakh to opt for composition scheme.

will he get ITC on his stock

[RAMESH PRAJAPATI]

If a dealer opts for composition scheme, he will not be allowed to claim ITC In fact he will not have any credit ledger. Closing balance will not be carried forward.

[Rajagopalan Ranganathan]

Sir,

If the dealer has proper invoices evidencing payment of vat prior to 1.7.2017 he need not pay gst when he sells the old stock on or after 1.7.2017. This is my opinion.

in conposition scheme there is no tax on sales. earlier he has taken credit of vat on purchases. so i think on appointed day gst ob stock shold be paid to govt and he will be not eligible to take credit of this gst.....

[KIRTIKUMAR PUROHIT]

I Agree with Pawan Kumar View: No ITC available on Balance stock on 30.06.2017 if intend to avail composition scheme.

No Credit of Input Tax
Any dealer registered under Composition Scheme will not be eligible to take credit of Input Tax credit on purchases. Also, the buyer of those goods will not get the credit of taxes paid.

[KASTURI SETHI]

Old stock as on 1.7.17 will fall under Composition Scheme. I support the views of Sh.Pawan Kumar ji.

[Pradeep Kaushik]

I have received goods return from my customer sold before 30 th june 2017 can i received goods through debit note and suggest for gst law for this transaction

[RAMESH PRAJAPATI]

If goods was supplied to a registered person before GST era and they have taken cenvat credit of excise duty, the customer should return the goods under their Tax Invoice after payment of GST enabling supplier to take ITC. If the customer was not registered, the supplier should go for refund as per section 142 (1) of the CGST Act 2017 ( reproduced below).

142. (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:

Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.

AI Summary

Composition scheme ITC denial on preappointed-day VAT-paid closing stock; tax outcome hinges on invoice evidence and return route.
A dealer electing the composition scheme cannot claim or carry forward input tax credit on pre-GST VAT-paid closing stock; if valid pre-GST invoices exist, one view holds no further tax is payable on subsequent sale of that old stock, while another view requires GST to be paid on closing stock at transition with no ITC. Returns of goods supplied before transition by unregistered persons may follow a refund route for duties paid, whereas returns by registered persons are treated as supplies.