COMPOSITION LEVY UNDER GST
The Goods and Services Tax
Act is likely to come into force with effect from 1.7.2017.
There are three types of return filing and tax payment options available
under the GST Act to dealers and service providers:
·
Monthly
·
Quarterly (for Compounding
options)
· Annual
Persons who want to avail input tax credit must opt for monthly basis
and persons who do not want to avail input tax credit may opt for
Compounding and a deductor under section 37 (Tax deduction at source), a casual
taxable person and a non-resident taxable person may opt for Annual basis.
For the dealers paying tax under compounding levy there are certain
conditions and restrictions.
Description
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Details
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Who has to apply for composition levy under GST
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Any person who has been granted registration on a
provisional basis under sub-rule (1) of rule Registration.17 and who opts to
pay tax under section 10, shall electronically file an intimation in FORM 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 thirty days after the said day, or such further period as
may be extended by the Commissioner in this behalf:
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Provided that where the intimation in FORM GST CMP-01 is 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
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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-3 in accordance with the
provisions of sub-rule (4) of rule
ITC.9 within sixty
days from the
commencement of the relevant financial year,
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Any person who files an intimation under
sub-rule (1) to pay tax under section
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 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.
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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
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Conditions to be complied with by the dealers who
opted to pay tax under section 10 i.e. Compounding Tax payment option
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He is neither a casual taxable person nor a
non-resident taxable person
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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
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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
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He shall pay tax under sub-section (3) or
sub-section (4) of section 9 on inward supply of goods or services or both;
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He was not
engaged in the
manufacture of goods
as notified under
clause (e) of sub-
section (2) of section 10, during the preceding financial year
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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
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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
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Validity of composition levy
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The option exercised by a registered person to
pay tax under section 10 shall remain valid so long as he satisfies all the
conditions mentioned in the said section and these rules.
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The person referred to in sub-rule (1) shall be
liable to pay tax under sub-section (1) of section 9 from the day he ceases
to satisfy any of the conditions mentioned in section 10 or these rules and
shall issue tax invoice for every taxable supply made thereafter and he shall
also file an intimation for withdrawal from the scheme in FORM GST
CMP-04 within seven days of
occurrence of such event.
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Method of filing the option
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The registered person
who intends to withdraw from
the composition scheme
shall, before the date of
such withdrawal, file an application in FORM GST CMP-04, duly signed or verified through EVC,
electronically on the Common Portal.
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Disallowing the option of Compounding levy by the
department
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Where the proper officer has reasons to believe
that the registered person was not eligible to pay tax under section 10 or
has contravened the provisions of the
Act or these rules, he may issue a
notice to such person in FORM GST CMP-05 to show cause within fifteen days of the
receipt of such notice as to why option to pay tax under section 10 should
not be denied.
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Filing of Stock Statement
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Every person who has furnished an
intimation under sub-rule (2) or filed an application for withdrawal under
sub-rule (3) or a person in respect of whom an order of withdrawal of option
has been passed in FORM GST CMP-07 under sub-rule
(5), may electronically furnish at the Common Portal, either directly or
through a Facilitation Centre notified by the Commissioner, a statement in FORM GST ITC-01 containing details
of the stock of inputs and inputs contained
in semi-finished or finished goods held in stock by him on the date on which
the option is withdrawn or denied, within 30 days, from the date from which
the option is withdrawn or from the date of order passed in FORM GST CMP-07, as the case may be.
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Provision to withdraw the composition levy option
filed
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Any intimation or application for
withdrawal under sub-rule (2) or (3) or denial of the option to pay tax under
section 10 in accordance with sub-rule (5) 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
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Rate of tax of the composition
levy
The category of registered persons,
eligible for composition levy under section
10 and 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:
S.No
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Category of registered persons
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Rate of tax
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(1)
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(2)
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(3)
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1
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Manufacturers,
other
than
manufacturers
of
such
goods as may be notified by the Government
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One per cent.
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2
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Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II
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Two and a half per cent.
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3
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Any other supplier eligible
for composition
levy
under section 10 and these rules
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Half per cent
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To view the full
details click the link below:
http://www.cbec.gov.in/resources//htdocs-cbec/gst/composition-gst-rules-17052017.pdf
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