Home Forums CGST Act Sec 10:Composition levy.

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      (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
      lieu 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.

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