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CS Executive · Tax Laws and Practice · Levy and Collection of GST

Kapoor Enterprises, a registered goods trader, had aggregate turnover of ₹40 lakh in the preceding financial year and is under composition. During the current financial year, its aggregate turnover crosses the section 10(1) limit of ₹50 lakh in October (assume no higher limit has been notified). What is the effect under section 10(3)?

The option lapses with effect from the very day the aggregate turnover during the year exceeds the specified limit. Section 10(3) makes the lapse automatic and prospective, so it is neither retrospective to April nor postponed to the next financial year.

  1. AThe option lapses from the beginning of the financial year
  2. BThe option lapses from the start of the next financial year
  3. CThe option lapses with effect from the day on which aggregate turnover exceeds the limitCorrect
  4. DThe option continues until the proper officer cancels it

Explanation

Section 10(3) provides that the option lapses with effect from the day on which aggregate turnover during a financial year exceeds the limit. It is neither retrospective to April nor deferred to the next year, and no officer order is needed.

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