ELIGIBILITY OF INPUT TAX ON COMPOSITION SCHEME WITHDRAWAL BY DEPARTMENT

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ELIGIBILITY OF INPUT TAX ON COMPOSITION SCHEME WITHDRAWAL BY DEPARTMENT

Oct 16 2019 Download Author: Shobhana Srivastava GST Input Tax Credit 58

To understand this first we need to understand the composition scheme.

A registered person whose aggregate turnover in the preceding year does not exceed  Rs.1.5crore , may opt to pay amount of tax calculated as per the composition scheme.

Suppose, Mr. A  is registered under the composition scheme. GST officers come for   investigation in the office premise of Mr. A and found that the aggregate turnover of Mr. A is more than 1.5crore and he is not eligible to pay tax under the composition scheme and issue  an order for withdrawal  of composition levy.

Now, the question is whether Mr. A is eligible to take ITC or not.

The answer of this question contained in Rule 6 of CGST Act which says that

Where the officer has proper reason to believe that the registered person is not eligible to pay tax under section 10 or has contravened the provision of the act ,he may issue a notice to such  person in GST FORM

CMP-05 to show cause within fifteen days of the receipt of the such notice as to why the  option to pay tax under section 10 shall not be denied.

 The registered person is required to send reply to the show cause in FOR GST CMP -06. The officer shall issue an order in FORM  GST CMP-07 within a period of thirty days of the receipt of such supply,  that whether the department accept the reply or denying the option to pay tax under section 10  from the date of the option or from the date of the contravention, as the case may be.

Every person who has furnished an intimation under sub-rule (2) or filed an application for withdrawal or a person against whom an order of withdrawal of option has been passed in FORM GST CMP-07 , may electronically furnish at the common portal, either directly or through a Facilitation Centre notified by the Commissioner, a statement in FORM GST  ITC- 01   containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which the option is withdrawn or denied, within a period of thirty days from the date from which the option is withdrawn or from the date of the order passed in FORM GST CMP-07, as the case may be.

Therefore, It is concluded that the person is eligible to take input even if the Department has withdrawn has been passed.

Composition levy  within a period of thirty days from the days on which the order for withdrawn has been passed.