Conditions and restrictions for composition levy of GST / Rule‑5 of CGST Rules 2017/ Rule‑5 of GST Composition Rules

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.