Mr. Arpit, doing business in the State of Kerala, commenced his business in the month of April and provides the following further information. (i)…

CA Final · Indirect Tax Laws · MTP · September 2025
Mr. Arpit, doing business in the State of Kerala, commenced his business in the month of April and provides the following further information. (i) His intra-State turnover for the first two quarters was as follows: April - June -20 lakh July - September -100 lakh (ii) In each of the quarters, exempt supply made by him was 25% of the total turnover for the said quarter. (iii) Since the product supplied by him was eligible for composition scheme, he opted for registration under composition scheme with effect from 1st July. You are required to compute the tax payable by Mr. Arpit under GST law from the above information: (i) If he is a manufacturer (ii) If he is a trader.

Suggested Answer and Working Notes:

As per section 10 of the CGST Act, 2017 read with rule 7 of the CGST Rules, 2017, a registered person opting for composition levy for goods pays tax at the rates mentioned below during the current FY, in lieu of the tax payable by him under regular scheme: Manufacturers, other than manufacturers of notified goods 1% (1/2% CGST+ 1/2% SGST/UTGST) of the turnover in the State/ Union territory Trader 1% (1/2% CGST+ 1/2% SGST/UTGST) of turnover of taxable supplies of goods & services in the State/ Union territory Turnover prior to getting registered will not be considered for determining the turnover in a State/Union Territory. (i) If Mr. Arpit is a manufacturer CGST = 100 lakh x 0.5% = 50,000 SGST = 100 lakh x 0.5% = 50,000 (ii) If Mr. Arpit is a trader CGST = 75 lakh (as 25% of turnover is exempt) x 0.5% = 37,500 SGST = 75 lakh (as 25% of turnover is exempt) x 0.5% = 37,500

Topics: Charge of GST

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