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If a composition taxpayer crosses the Rs 1.5 crore threshold mid-year, he:
AContinues in composition till the end of the FY
BGets retrospective change from start of the year
CHas to wait till next FY
DBecomes liable to switch to regular scheme from the day the threshold is crossed
Answer & Solution
Correct answer: D. Becomes liable to switch to regular scheme from the day the threshold is crossed
1. Sec 10(3) makes the composition option lapse from the day the turnover exceeds the prescribed threshold.
2. Rule 6(2) requires the taxpayer to file Form GST CMP-04 within 7 days of the event.
3. From that day onwards, he must issue tax invoices, collect GST, and file normal returns.
_Source: ICAI BoS CA Final Paper 8, Ch 3 "Levy and Collection of Tax", §Sec 10(3) + Rule 6(2)_
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