Question6:

On Composition: Shifting from Composition to Regular and vice versa Earlier if we shift from Composition to Normal then our Composition becomes operational from the 1st day of the next month- please explain how the composition return will go - suppose if we make the request from transfer from Composition to Normal on 15th of November- the date when the notification of 5% is issued - our Normal return period will start from 1st December or 1st January- as our sale is below 1.5 crores- do we have to file two returns - one for Composition - that is from 1st October to 14th November or 1st October to 30th November, Or from 1st October to 31st December. Similarly what would be the return period for Normal Return from 15th November to 31st December, in case we opt for less than 1.5 crores, And in case we opt for more than 1.5 crores then from 15th November to 30th November. How do we opt for less than 1.5 crore and more than 1.5 crore return period. Similarly vice versa- what will happen if we shift from normal to composition dealer mid of the month say again 15th Nov- how to file returns-  what would be the return period. If our option to go out will start from next month then how to take the benefit of 5% rate in the case of composition dealer with effect from 15th November- or should we surrender Composition in December so that normal return period start from 1st January.

Answer: (A) 

When shifting from Composition to Normal on 15.11.2017 and turnover being below Rs. 1.5 crore, you will have to file two quarterly returns i.e one for the composition levy from 1.10.2017 to 14.11.2017 during the month of January, 2018 and second 3B return that too quarterly from 15.11.2017 to 31.12.2018 in the month of January, 2018.  

(B)  When shifting from Normal to Composition on 15.11.2017 and turn over being below Rs 1.5 crores, as per Rule 3(3A) of CGST Rules, 2017 scheme for composition will become operation from 1.12.2017. In this situation you will have to furnish quarterly 3B return from 1.10.2017 to 14.11.2017 in the month of January, 2018 and quarterly Composition return from 15.11.2017 to 31.12.2017in the month of January, 2018,   In case turn over is over 1.5 crores you will not be able to shift from Normal to Composition as per provisions of Section 10 of CGST Act, 2017.   Since your option to shift from composition to Normal will become effective from 1.12.2017 you can continue to pay tax @ 5% till 30.11.2017. (Reply dt. 09/12/2017)