COMPOSITION PERSON : WHETHER CLOSING STOCK IS TO BE TAXED AT THE TIME OF CANCELLATION OF REGISTRATION

[Deepak Garg]

Sir

One of my client applied for cancellation of registration who was registered under composition scheme. At the time of application for cancellation he has a stock of ₹ 5,00,000/- no ITC was claimed. Please give your expert opinion regarding tax on closing stock. Whether the registered person is liable to tax under section 29(5).

AI Summary

No GST on Closing Stock for Composition Scheme Client Cancelling Registration Without ITC, Says Section 29(5) SGST Act. A client registered under the GST composition scheme is seeking advice on whether they need to pay tax on closing stock valued at 5,00,000 upon cancellation of their registration, given that no Input Tax Credit (ITC) was claimed. Two experts, Alkesh Jani and Kasturi Sethi, responded, agreeing that under Section 29(5) of the SGST Act, no tax is required on the closing stock since ITC was not availed. Therefore, the client is not liable to pay GST on the stock held at the time of registration cancellation.