10 Composition levy.
(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 2[1 crore], may opt to pay,*3in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding,––
(a) 1half 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) 1half per cent.of the turnover of taxable supplies of goods 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 2[1 crore ] *4one crore and fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council.
*5Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.
(2) The registered person shall be eligible to opt under sub-section (1), if––
*6(a) save as provided in sub-section (1), he is not engaged in the supply of services;
(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.
Note-
1.Subsituted by Notification No. 8/2017-Central Tax issued dated 27thJune,2017
Substituted by Notification No. 01/2018 – Central Tax issued dated 1st January, 2018
2. In sub-section (1), for the words “fifty lakh rupees”, the words “seventy five lakh rupees” shall be substituted.
In Proviso to sub-section (1), for the words “fifty lakh rupees”, the words “seventy five lakh rupees” shall be substituted.
Seventy five lakh rupees shall be substituted by 1 crore. Notification No. 46/2017- Central Tax dated 13th October 2017.
*3.Subsituted by Notification THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT)BILL, 2018 (NO. 31 OF 2018)
*4.Subsituted by Notification THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT)BILL, 2018 (NO. 31 OF 2018)
*5.Inserted by Notification THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT)BILL, 2018 (NO. 31 OF 2018)
*6.Subsituted by Notification THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT)BILL, 2018 (NO. 31 OF 2018)