4th May 2017
India being an Independent nation is only a stage behind from receiving the biggest taxation system known as Goods and Service Tax (GST) and that is going to happen most recent by July, 2017 which turns into the greatest expense change in India. It makes one National Tax supplant a huge number of complex ones that contrast from state to state. It will replace most of the local existing local taxes and bring a huge change how indirect taxes are collected.
To help small business tackle the bothers of gathering GST, claiming input tax credit etc the model GST law has proposed a simpler levy known as Composition Levy.
Earlier in 2003, an idea was presented in State VAT ACT under which the merchant is required to pay a fixed rate of tax on his pronounced turnover, and no VAT set off/credits would be down the supply chain. The biggest attraction for a merchant then, under that law, was that they were not required to maintain proper book accounts or records of material executed under VAT law. It's implied that in the event that they were keeping up books it was not subject to investigation under the separate VAT laws.
The same concept will be introduced under the GST Law Model and can be opted by those:-
1. Taxable individual was not eligible under this scheme
2. Permission granted was incorrectly granted earlier
What Else do we have to Consider?
Further, from Compliance front, a Composition merchant is required to file a quarterly return according to GSTR-4. In this, he needs to give Invoice insightful subtle elements of his buys including abroad buys of Goods and Capital Goods and all outward supplies summary. Indeed, even under GST, a Taxable individual enrolled under Composition is not required to keep up books of Accounts, and records of the transaction of materials according to the law. In any case, when such a large number of points of interest are required, is the plan in the law the same or is it just an eye wash?
On the off chance that you burrow further, when the composition merchant sell, he either pitches to another composite merchant (whose GSTR-4 moves toward becoming supplies of the vender) or another merchant (whose GSTR-2 turns into his provisions of the dealer). At the end of the day, the books can be remade with points of interest of internal and outward supplies on GSTN frameworks. Does this truly offer the merchant a reprieve and would you be able to get away from the eyes of the taxman whichever way?
So on the off chance that you come to an obvious conclusion, you are required to keep up books of records or more all, are liable to the investigation.
What's more, there are complications and restrictions as:
On the off chance that you select the composition in one state, you have to pick in different states as well.
Limitation to do between state deals (IGST)
Confinement on invert charge buys and so forth.
With every one of these difficulties, a Composition Levy under GST is neither down to earth nor valuable.
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