Composition Rules of CGST Rules 2017

3. Inti­ma­tion for com­po­si­tion levy.- (1) Any per­son who has been grant­ed reg­is­tra­tion on a pro­vi­sion­al basis under clause (b) of sub-rule (1) of rule 24 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 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-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.

  • 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
  • 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
  • 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 six­ty days from the date on which the option for com­po­si­tion levy is exer­cised or with­in such fur­ther peri­od as may be extend­ed by the Com­mis­sion­er in this
  • 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 Per­ma­nent Account

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:-

  • he is nei­ther a casu­al tax­able per­son nor a non-res­i­dent tax­able person;
  • 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;

  • 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;
  • he shall pay tax under sub-sec­tion (3) or sub-sec­tion (4) of sec­tion 9 on inward sup­ply of goods or ser­vices or both;
  • 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;
  • 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
  • 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

 

(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

 

  • 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

 

  • 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.

 

  • 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

 

  • 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

 

  • 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.

 

  • 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 Per­ma­nent Account

 

  1. 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 column

(2) of the Table below shall pay tax under sec­tion 10 at the rate spec­i­fied in col­umn (3) of the said Table:-

 

Sl.

No.

Cat­e­go­ry of reg­is­tered persons Rate of tax
(1) (2) (3)
1. Man­u­fac­tur­ers, oth­er than man­u­fac­tur­ers of such goods as may be noti­fied by the Government one per cent.
2. Sup­pli­ers mak­ing sup­plies referred to in clause (b) of para­graph 6 of Sched­ule II two and a half per cent.
3. Any oth­er sup­pli­er eli­gi­ble for com­po­si­tion levy under sec­tion 10 and the pro­vi­sions of this Chapter half per cent.

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