Anil, a retailer who keeps zero inventories, presents the following expected information for the year: (a) Purchase of goods: ₹ 50 lakh (GST @ 5% extra) (b) Sales (at fixed selling price inclusive of all taxes): ₹ 60 lak

The Cost to the ultimate consumer under two schemes is as under: Particulars Normal GST Scheme (₹) Composition Scheme (₹) Cost of goods sold (No credit under composition scheme, hence, cost of goods sold will be higher) 50,00,000 52,50,000 (50,00,000+5%) Add: Costs of maintaining records 1,75,000 75,000 Add: Other Fixed Expenses 2,75,000 2,75,000 Total Costs (A) 54,50,000 56,00,000 Sales (inclusive of all taxes) 60,00,000 60,00,000 Less: Tax (Normal GST Scheme ₹ 60 lakh x 5/105; Composite Scheme = ₹ 60 lakh x 1%) 2,85,714 60,000 Sales (net of taxes) (B) 57,14,286 59,40,000 Profit of the dealer (Sales, net of taxes - Total Costs) (A-B) 2,64,286 3,40,000 Conclusion: Profit of the dealer is higher if the dealer opts for composition scheme. Hence, Composition Scheme should be opted.