CGST Rule 5 of Central Goods and Services Tax Rules, 2017 – Conditions and restrictions for composition levy

The Central Goods and Services Tax Act, 2017

The Central Goods and Services Tax Rules, 2017

Chapter-II ¹[Composition Levy]

Rule 5: Conditions and restrictions for composition levy.

5. (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.

References

Enforcement:

Enforced w.e.f. June 22, 2017 [Notification No. G.S.R. 610(E) dated 19.06.2017].

Amendments:

1. Substituted by Central Goods and Services Tax (Amendment) Rules, 2019 vide Notification No. 03/2019-Central Tax dated 29th January, 2019, w.e.f. 01.02.2019, for the heading “Composition Rules”.