Comparison of Provision Regarding Composition Scheme under Current U.P VAT Act,2008 VS Model GST Regime

Sr. No. Basis Under UP Act 2008 Model GST Law For Works Contract or For Others
1 Governing Section Section-6-

Composition of tax liability

Section-9-

Composition Levy

 

2 Eligibility Any Person fulfilling T/o criteria (other than person engaged in Works Contract i.e. on works contractor no T/o Limit is  applicable) Person fulfilling T/O limit other than

1. Engaged in supply of  services

2. Person engaged in interstate supply

3. Person making Non- Taxable Supply

4. E-Commerce Operator

5. All the taxable person has common PAN shall opt the scheme simultaneously

Spl. Point: T/o Limit Applicable in case of Work Contractor unlike in UP VAT Act.

Under

Current

UP VAT:

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Eligible (No T/o Limit)

Under

Current

UP VAT:

Eligible (Subject to T/o Limit)

Under GST:

Eligible (Subject to T/o Limit)

Under GST:

Eligible (Subject to T/o Limit)

3 Turnover Criteria Current Year T/o-50 lakhs or less Previous Year T/o-50 lakhs or less Current Year T/o-50 lakhs or less T/o limit need to be complied with
4 ITC Cannot avail and utilize ITC of the tax paid at the time of purchase Cannot avail and utilize ITC of the tax paid at the time of receiving supply Taxes on Input side would become part of cost
5 Tax Invoice Cannot issue Tax invoice and pass on the credit of tax nor charge the same from customer in the invoice, it is paid on T/o of the assessee at fixed rate which form part ofof cost. Cannot issue Tax invoice and pass on the credit of tax nor charge the same from customer in the invoice, it is paid on T/o of the assessee at fixed rate which form part of cost. No tax invoice need to be issued, Ease in compliance of the same
6 Rate of Tax 1 % [Notification No : KA.NI-2- 251/XI- 9(2)/08- U.P.Ordi.-37- 2008-Order- (5)-2008 Dated 4th February, 2008] For Manufacturer- 2.50% (Min.) Others-1% (Min.)

[Not less than 2.5%/1% as per Section-9 actual rate still to be specified]

Actual rate still to be notified but an floor rate being specified in the section itself
7 Penal Provision If assessee not falling in the above Scheme and opts for the same the proper officer may after giving opportunity of being heard recover tax, interest and penalty of equal amount [As per Section 9(4)]thereon as recovery under GST Officer may after applying principles of Natural Justice initiate penal action as specified
8 TRANSITIONAL PROVISIONS

8.1. Assessee shifting from Normal Tax Regime under Earlier law to Composition Scheme under GST N.A Allowed but the ITC of stock lying in the stock shall be paid by him before switching in composition scheme in GST May apply if opted for composition scheme in GST Law
8.2. Assessee shifting from Composition Scheme under Earlier law to Normal Tax Regime under GST N.A Allowed and the ITC of stock(incl. input, semi-finished goods, and finished goods) lying in the stock shall be allowed to be booked and utilize under GST regime subject to condition specified in GST Model Law May apply if opted for composition scheme in Earlier Law

 

9 Others Spl. Points: Can opt if Beneficial but giving regards to the cost benefit analysis and compliance difficulties that may be faced by the organization while _ going in normal tax regime
1. Optional Scheme

2. Only for small assessee subject to T/o

3. Available to both trader and Service provider

4. Can pay tax on Quarterly basis

5. Relaxation in filling of Outward and Inward supply return

6. No Need to file Annual Return

Note: For any clarification/ suggestion please do contact under signed.

Ashish Mittal

(Article Assistant at S.S. Khothari Mehta & Co.)

M.No.- +91-9582532845

Email Id.- ashishmittal5555@gmail.com

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