Composition dealer to Regular dealer
Composition dealer to Regular dealer:
There are many dealers already registered under the current tax structure. All registered dealers under the current tax structure will be automatically transitioned to GST that is the format and they will be given a provisional registration ID. A change will be from composition dealer to regular dealer too. After validating all the details submitted during enrolment, final registration IDs will be issued.
Under GST, a registered taxable person whose aggregate turnover does not excess Rupees 50 lakhs during the financial year can opt for composition scheme. Where in it must be noted that if a dealer is under the composition scheme in the current tax structure then he will be under the composition scheme in the GST structure also. But he is having that provision of transition to GST, a Composition Dealer may switch over as a Regular Dealer.
But, upon the transition to GST from composite dealer to the regular one the provisions will be according to the regular dealer. one can avail input tax credit, Compliance will be according to the GST law for a regular dealer.
How can composition dealer be switched to a regular dealer?
But there are two possibilities for a Composition Dealer to switch to a Regular Dealer they are, Voluntarily opts to become a regular dealer or this can be by enforcement of law that is, if the aggregate turnover exceeds the prescribed threshold limit of Rupees 50 Lakhs, he may not be eligible to opt for composition levy under GST. Upon these two conditions a person will be switched from a composition dealer to the regular dealer.
Upon becoming a Regular Dealer, he/she will be allowed to avail the tax credit held in the closing stock of inputs (raw- materials), semi- finished goods, and finished goods. but there are conditions that you need to meet to be eligible to avail the input tax credit held in your closing stock.
One can avail ITC under some circumstances, those are, closing stock held either in the form of raw materials, semi-finished goods or finished goods, must be used or intended to be used for taxable supplies.
The VAT paid on inputs held in the closing stock should be allowed as credit under the earlier law. This is applicable only for claiming credit of VAT.
You have invoices or any other prescribed duty/tax paying documents in respect of the closing stock of inputs (including semi-finished goods and finished goods).Tax documents needed for claiming GST Input tax credit
The date of invoices or any other prescribed duty/tax paying documents is within 12 months from the date of transitioning to GST.