Remove condition of not having Imported goods stocks under Rule 3 Composition Rule – ICAI – GST Rules Issue 29

By | May 11, 2017
(Last Updated On: May 11, 2017)

Condition of not having stocks of Imported goods

As per rule 3(1)(b) of draft GST Composition Rules a composition dealer is required to comply with following condition: –

The goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State, where the option is exercised under sub-rule (1) of rule 1;


It seems that restriction in such cases is imposed since the dealer pays a lower or concessional rate of tax on such purchases at present and he will be going to pay tax at Composition rate. However, imports are brought after paying at full rates of BCD, CVD and SAD. No Concession whatsoever is granted in the tax rates of Imports. Thus, restriction of such purchases is unjustified.

Also, it is very difficult to recognize which item was purchased from outside state or from unregistered dealer out of closing stock held on appointed date.


It is suggested that the condition for not having stocks of Imported goods be removed.

Source ICAI Suggestions on GST Rules Submitted to Govt of India

Leave a Reply

Your email address will not be published. Required fields are marked *