vinujaglan.com · Founder's official site 
GST: composition or regular?
| Composition | Regular (QRMP up to ₹5 crore) | |
|---|---|---|
| Rate | 1% of turnover (traders) | Normal rates collected from customers |
| Input tax credit | Not available | Available |
| Inter-state sales | Not allowed | Allowed |
| Returns | CMP-08 quarterly + GSTR-4 annual | GSTR-1 + GSTR-3B (quarterly under QRMP) |
| Best for | Retail to consumers, low margins | B2B sales, inter-state, high ITC |
Cash rules that cause trouble
- Section 269ST: no receipt of ₹2 lakh or more in cash from one person in a day or for one transaction — penalty equals the amount
- Section 40A(3): cash expenses above ₹10,000 per day per person are disallowed
- Large cash deposits are reported to the department — keep sales registers and Z-reports
Other points
- Buyers with turnover above ₹10 crore deduct 0.1% TDS under 194Q on purchases above ₹50 lakh from you
- E-invoicing applies above ₹5 crore turnover
- Udyam registration helps with loans; the 43B(h) payment protection does not cover traders
Advance tax
Presumptive taxpayers pay their entire advance tax in one instalment by 15 March. You can always declare a higher income than the presumptive rate; declaring lower needs books and, above the basic exemption limit, a tax audit.
Worked example
Example
Example: A hardware shop has turnover of ₹1.2 crore, ₹80 lakh through UPI and ₹40 lakh cash. 44AD income = 6% × ₹80 lakh + 8% × ₹40 lakh = ₹8 lakh. Under the new regime the tax is nil (rebate up to ₹12 lakh).
Common mistakes
- Accepting ₹2 lakh+ in cash for one sale
- Choosing composition and then making inter-state sales
- GST turnover not matching ITR turnover
Frequently asked questions
Yes, by filing an intimation — you can then claim ITC on stock held on that date, within limits.
Last reviewed on 11 November 2026 by Vinay Jaglan, VJ & Associates. Law and portal screens change — verify before acting, or ask the office.
