Respected Sir, if dealer is registered under composition scheme in GST and he gets his registration cancel due to 'CEASED TO LIABLE PAY TAX' and having any taxable stock then Is he liable to pay tax at the time of cancellation on stock on date of cancellation? If yes at what rate Composition rate or Rate on which goods purchased? Please help. Thanks

Reply—As per Section 29(5) of CGST Act, every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed.

As per above provision, composition dealer is required to pay GST on Closing stock at the time of cancellation of GST registration at the rate applicable on composition dealer.

At the time of making application for cancellation of registration, value of stock and the corresponding tax liability on the stock need to be declared. On the basis of entered stock details, taxpayer needs to enter the value to offset the liability (tax payable) that you wish to offset from either the Electronic Cash Ledger, or the Electronic Credit Ledger, or both.