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TMI BlogChange of Tax rate during Mid of the yearX X X X Extracts X X X X X X X X Extracts X X X X ..... Change of Tax rate during Mid of the year X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2017, the taxpayer can pay Tax @5% without availing ITC or pay @12% with ITC. The business was started during FY 2019-20 and the taxpayer has opted 2nd option i.e. 12% with ITC. Now taxpayer wants to shift tax rates option from "12% -with ITC" to "5%-without ITC" from October 2021 onwards. In this regards, please share your view on following : * Whether it can be done in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id of the year ? please also share relevant notification, if any. * If option one is not doable, can it be done in beginning of the next financial year i.e. April 2022? please supportings, if any * Please also suggest procedure if any for informing, change in option to GST deptt, if any required. Thanks , Regards, Pankaj Singh Reply By Rajagopalan Ranganathan: The Reply: Sir, The Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation does not prohibit changing from one rate of tax to another rate in the middle of the financial year. However, if you change from 12% to 5% then you have the reverse credit available in your electronic credit ledger on the date of switching over from 12% to 5%. Reply By Rajagopalan Ranganathan: The Reply: Regarding question No.2 you can switch over from 12% to 5% at the beginning of the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year 2022-23. Here also you have to reverse the credit available in your electronic credit ledger. You can inform the Department through a simple intimation letter regarding your option to change from 12% to 5% Reply By PANKAJ SINGH: The Reply: Thanks Sir....please share any notification or reference to rules/law form which suggest that changes can be opt from beginning of the year ... R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply By Rajagopalan Ranganathan: The Reply: Sir, As per the Notification, there is no condition that the option to avail 5% tax without ITC or 12% tax ITC can be exercised only at the beginning of the financial year. Hence no notification or circular has been issued. It is your option to avail of the benefit either at the mid-year or at the beginning of the financial year. Reply By Shilpi Jain: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Reply: In this case the rate of tax is based on each transaction unlike in the case of a GTA. So you can simultaneously have 2 different transactions with different rates of GST. The rate of tax is based o the conditions in the rate notification Reply By KASTURI SETHI: The Reply: SH.PANKAJ SINGH Ji, Practically better option for a change is next financial year i.e. in the month of April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 22. If you opt for in the mid stream, you will face various difficulties in accounting matters i.e. audit, refunds, cost basis certificate etc.. To change in the middle is not a visionary step.
Reply By PANKAJ SINGH:
The Reply:
Thank you so much everyone for your time and advise. X X X X Extracts X X X X X X X X Extracts X X X X
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