Composition limit under Section 10 crossed

[gunda ashok kumar]

Sir,

One of my client has opted the composition scheme under section 10 of CGST Act and forgotten to give option to come out from the composition. The authority has levied the tax as per scheduled rates of 12% and 18% on taxable goods but denied ITC as per Section 18 of the CGST Act.

1.Pl clarify whether the client is eligible ITC during the period in dispute as per Section 18 when the client was not opted from composition to regular taxpayer?

AI Summary

Composition scheme exit and input tax credit eligibility depend on compliant ITC filing and observance of procedural safeguards.
Entitlement to input tax credit for a person exiting the composition scheme depends on filing FORM ITC-01 within the prescribed period for inputs and stock held on the withdrawal date; limited judicial condonation of delay has occurred for sufficient cause. The officer must follow show-cause, reply and order procedures before denying the composition option, and failure to follow due process may render a denial or tax demand contestable; separate penalty and assessment provisions may apply where ineligibility is found.