Chapter II of CGST Rules, 2017


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RULE -5.  Conditions and restrictions for composition levy.-    (corresponding section 10)

(1) The person exercising the option to pay tax under section 10shall 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.


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1. Substituted Vide :- Notification No. 3/2019-Central Tax Dt.29.01.2019 [Para 2]