Ganga Co. Ltd. commenced business on 01-07-2018. It applied for registration on 05-08-2018. The registration was granted on 07-08-2018. What is the effective date of registration? Instead of 01-07-2018, if it had commenc

Eligibility for composition levy As per rule 10(3) of CGST Rules, 2017 if the applicant has submitted an application for registration after the expiry of 30 days from the date of his becoming liable to registration, the effective date of registration shall be the date of the grant of registration. Ganga Co Ltd commenced business on 01.07.2018 but applied on 05.08.2018 and it was granted on 07.08.2018. Since, the application for registration has been made after the expiry of 30 days from the date when it was liable to obtain registration, the effective date of registration would be the date of grant of registration i.e. 07.08.2018 . If it had commenced business on 20.07.2018, the application for registration submitted within 30 days i.e. 07.08.2018, hence the effective date of registration would be 20.07.2018 . Under section 10 of the CGST Act, a registered person opting to pay tax under composition levy can apart from manufacture / supply of goods, provide service not exceeding 10% of total turnover or ₹ 5 lakhs whichever is higher. In this case the annual turnover is ₹ 125 lakhs and hence the higher of the two limits is ₹ 12.5 lakhs; the amount received by way of supply of service is ₹ 7 lakhs which is less than 10% of the total turnover. Hence, Ganga Co Ltd is eligible for composition levy .