Composition Levy under GST, Section 10 of CGST Act,2017

 

 

CGST Act,2017 COMPOSITION OF GST LEVY

 

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The below post explains about Composition levy under section 10 of CGST Act,2017.

 

Section 10 of CGST Act, 2017 explains Composition levy as below: (The amendments if any will also be updated here soon).

 

The extract of Section 10 of CGST Act,2017 quoted below:

 

10  Composition levy.

 

10. (1) Notwithstanding anything to the contrary contained in this Act but subject to

the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate

turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in

Composition Levy under GST, Section 10 of CGST Act,2017lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but

not exceeding,––

(a) one per cent. of the turnover in State or turnover in Union territory in case of

a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory

in case of persons engaged in making supplies referred to in clause (b) of paragraph 6

of Schedule II, and

(c) half per cent. of the turnover in State or turnover in Union territory in case of

other suppliers,

subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh

rupees to such higher amount, not exceeding one crore rupees, as may be recommended by

the Council.

 (2) The registered person shall be eligible to opt under sub-section (1), if––

(a) he is not engaged in the supply of services other than supplies referred to in

clause (b) of paragraph 6 of Schedule II;

(b) he is not engaged in making any supply of goods which are not leviable to tax

under this Act;
(c) he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged in making any supply of goods through an electronic

commerce operator who is required to collect tax at source under section 52; and

(e) he is not a manufacturer of such goods as may be notified by the Government

on the recommendations of the Council:

Provided that where more than one registered persons are having the same Permanent

Account Number (issued under the Income-tax Act, 1961), the registered person shall not be

eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to

pay tax under that sub-section.

(3) The option availed of by a registered person under sub-section (1) shall lapse with

effect from the day on which his aggregate turnover during a financial year exceeds the limit

specified under sub-section (1).

(4) A taxable person to whom the provisions of sub-section (1) apply shall not collect

any tax from the recipient on supplies made by him nor shall he be entitled to any credit of

input tax.

(5) If the proper officer has reasons to believe that a taxable person has paid tax under

sub-section (1) despite not being eligible, such person shall, in addition to any tax that may

be payable by him under any other provisions of this Act, be liable to a penalty and the

provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax

and penalty.

 

 

The above information clarifies about Composition levy under section 10 of CGST Act,2017.  

 

If you have any comments about Section 10 of CGST Act, 2017 explaining Composition levy, share below your thoughts:

 

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Comments


rounak sancheti: Hello, I want to know whether inter state purchase is allowed under composition scheme? Also provide me any supporting document regarding the same if you have it.

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