Rule

Description

3.

Intimation for composition levy

(1)

Any
person who has been granted registration on a provisional basis under rule
24(1) (b), 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, 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 days after
the said day, or before 16th August 2017
[Order 1/2017].

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.

(2)

Any
person who applies for registration under sub-rule (1) of rule 8 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 electronic verification code, 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-03
in accordance with the provisions of sub-rule (4) of rule 44 within a period
of sixty days from the commencement of the relevant financial year.

(3A)

Notwithstanding
anything contained in sub-rules (1), (2) and (3), a person who has been
granted registration on a provisional basis under rule 24 or who has been
granted certificate of registration under sub-rule (1) of rule 10  may opt to pay tax U/S 10 with effect from
the first day of the month immediately succeeding the month in which he files
an intimation in FORM GST CMP-02,
on the common portal either directly or through a Facilitation Centre
notified by the Commissioner, on or before the 31st day of March, 2018, and
shall furnish the statement in FORM
GST ITC-03
in accordance with the provisions of sub-rule (4) of rule 44 within
a period of one hundred and eighty days
from the day on which
such person commences to pay tax under section 10:

Provided
that the said persons shall not be allowed to furnish the declaration in FORM
GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.
[Notification No. 45/2017] & [Notification No. 3/2018]

(4)

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 a period of 90  days
[Notification No. 22/2017] from the date on which the option for composition levy is
exercised or within 31st January 2018
[Order No. 11/2017-GST].

(5)

Any
intimation under sub-rule (1) or sub-rule (3) or sub-rule 3A 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
Permanent Account Number.

4.

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
3 and the appointed day where the intimation is filed under sub-rule (1) of
the said rule.

(2)

The
intimation under sub-rule (2) of rule 3, shall be considered only after the
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 10.

5.

Conditions and restrictions for composition levy

(1)

The
person exercising the option to pay tax under section 10 shall comply with
the following conditions, namely:-

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 3;

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
sub-section (2) of section 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.

6.

Validity of composition levy

(1)

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 under these rules.

(2)

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 the provisions of this Chapter 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
the occurrence of such event.

(3)

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 electronic verification code, electronically on the common
portal.

(4)

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 provisions of this Chapter, 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 the option to pay tax
under section 10 shall not be denied.

(5)

Upon
receipt of the reply to the show cause notice issued under sub-rule (4) from
the registered person in FORM GST
CMP-06
, the proper officer shall issue an order in FORM GST CMP-07 within a period of thirty days of the receipt of
such reply, either accepting the reply, or denying the option to pay tax
under section 10 from the date of the option or from the date of the event
concerning such contravention, as the case may be.

(6)

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 a period of thirty days from the
date from which the option is withdrawn or from the date of the order passed
in FORM GST CMP-07, as the case
may be.

(7)

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.

7.

Rate of tax of the composition levy

 

The
category of registered persons, eligible for composition levy under section
10 and the provisions of this Chapter, specified in below shall pay tax at
the rate specified in said Table:-

Category of registered persons

Rate*

Up to 31.12.17

[Notification No. 8/2017]

From 01.01.18#

[Notification No. 1/2018]

Manufacturers,
other than manufacturers of such goods as may be notified by the Government

1%

0.5%

 

Suppliers
making supplies referred to in clause (b) of paragraph 6 of Schedule II

2.5%

2.5%

Any
other supplier eligible for composition levy under section 10 and the
provisions of this Chapter

0.5%

0.5%of
turnover of taxable supplies of goods

*Note: SGST
Act also prescribes the same rate. Therefore, the total rate will be twice
the above given rate.

# From
01.01.18,
tax shall be calculated
on the turnover in the State or Union territory.
[Notification No. 3/2018]

Reference:

Notification No. 34/2017