COMPOSITION SCHEME RULES
- Intimation for composition levy
(1) Any person who has been granted registration on a provisional basis and who opts to pay tax under Section 10, shall electronically file an intimation inForm GST CMP 01, duly signed or verified through electronic verification code (EVC), on the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the appointed day, but not later than 30(Thirty) days after the said day, or such further period as may be extended by the Commissioner in this behalf:
Provided that where the intimation in Form GST CMP 01is filed after the appointed day, the registered person shall not collect any tax from the appointed day but shall issue bill of supply for supplies made after the said day.
(2) Any person who applies for registration under rule Registration.1 may give an option to pay tax under Section 10?in Part B of Form GST REG-01, which shall be considered as an intimation to pay tax under the said section.
(3) Any registered person who opts to pay tax under Section 10?shall electronically file an intimation in Form GST CMP 02, duly signed or verified through EVC, on the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised and shall furnish the statement in Form GST ITC 3in accordance with the provisions of sub-rule (4) of rule ITC.9 within 60(Sixty) days from the commencement of the relevant financial year,
(4) Any person who files an intimation under sub-rule (1) to pay tax underSection 10. shall furnish the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the said section, electronically, in Form GST CMP 03, on the Common Portal, either directly or through a Facilitation Centre notified by the Commissioner, within 60(Sixty) days of the date from which the option for composition levy is exercised or within such further period as may be extended by the Commissioner in this behalf.
(5) Any intimation under sub-rule (1) or sub-rule (3) in respect of any place of business in any State or Union territory shall be deemed to be an intimation in respect of all other places of business registered on the same PAN.
- Effective date for composition levy
(1) The option to pay tax under Section 10 shall be effective from the beginning of the financial year, where the intimation is filed under sub-rule (3) of rule 1 and the appointed day where intimation is filed under sub-rule (1) of the said rule.
(2) The intimation under sub-rule (2) of rule 1 shall be considered only after grant of registration to the applicant and his option to pay tax under Section 10 shall be effective from the date fixed under sub-rule (2) or (3) of rule Registration.3.
- Conditions and restrictions for composition levy
(1) The person exercising the option to pay tax under Section 10 shall comply with the
(a) he is neither a casual taxable person nor a non-resident taxable person;
(b) 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;
(c) the goods held in stock by him have not been purchased from an unregistered supplier and where purchased, he pays the tax under sub-section (4) of section 9;
(d) he shall pay tax under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both;
(e) he was not engaged in the manufacture of goods as notified under clause (e) of subsection (2) ofSection 10, during the preceding financial year;(f) he shall mention the words composition taxable person, not eligible to collect tax on supplies at the top of the bill of supply issued by him; and
(g) he shall mention the words composition taxable person on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.
(2) The registered person paying tax under Section 10 may not file a fresh intimation every year and he may continue to pay tax under the said section subject to the provisions of the Act and these rules.
4. Rate of tax of the composition levy
The category of registered persons, eligible for composition levy under Section 10and these rules, specified in column (2) of the Table below shall pay tax under Section 10 at the rate specified in column (3) of the said Table:
|Si No.||Category of Registered Persons||Rate of Tax|
|1||Manufacturers, other than manufacturers of such|
|goods as may be notified by the Government||1%|
|2||Suppliers making supplies referred to in clause (b)|
|of paragraph 6 of Schedule IINoI||2.50%|
|3||Any other supplier eligible for composition levy|
|under section 10 and these rules||0.50%
Some Important Points Highlighted in Below Sheet: