Section
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 fifty
lakh rupees, may opt to pay, 1[in 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)
one percent of the turnover in State or turnover in Union territory in case of
a manufacturer,
(b)
two and a half percent 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 percent 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 2[one crore and fifty lakh rupees],
as may be recommended by the Council:
3[Provided
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].
4[Explanation.-
For the purposes of second proviso, the value of exempt supply of services
provided by way of extending deposits, loans or advances in so far as the
consideration is represented by way of interest or discount shall not be taken
into account for determining the value of turnover in a State or Union
territory].
(2)
The registered person shall be eligible to opt under sub-section (1), if :-
5[(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 12[****] 6[services] which are not
leviable to tax under this Act;
(c)
he is not engaged in making any inter-State outward supplies of goods 7[or
services];
(d)
he is not engaged in making any supply of goods 8[or services] through an
electronic commerce operator who is required to collect tax at source under
section 52; 9[****]
(e)
he is not a manufacturer of such goods as may be notified by the Government on
the recommendations of the 10[Council ;and]
11[(f)
he is neither a casual taxable person nor a non-resident taxable person:]
Provided
that where more than one registered persons are having the same Permanent
Account Number [issued under the Income-tax Act, 1961(43 of 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.
11[(2A)
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,
not eligible to opt to pay tax under sub-section (1) and sub-section (2), 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 under sub-section (1)
of section 9, an amount of tax calculated at such rate as may be prescribed,
but not exceeding three per cent. of the turnover in State or turnover in Union
territory, if he is not-
(a)
engaged in making any supply of goods or services which are not leviable to tax
under this Act;
(b)
engaged in making any inter-State outward supplies of goods or services;
(c)
engaged in making any supply of 13[****] services through an electronic
commerce operator who is required to collect tax at source under section 52;
(d)
a manufacturer of such goods or supplier of such services as may be notified by
the Government on the recommendations of the Council; and
(e)
a casual taxable person or a non-resident taxable person:
Provided
that where more than one registered person are having the same Permanent
Account Number issued under the Income-tax Act, 1961 (43 of 1961), the
registered person shall not be eligible to opt for the scheme under this
sub-section unless all such registered persons opt to pay tax under this
sub-section.]
(3)
The option availed of by a registered person under sub-section (1) 11[or
subsection (2A), as the case may be,] shall lapse with effect from the day on
which his aggregate turnover during a financial year exceeds the limit
specified under sub-section (1) 11[or sub-section (2A), as the case may be.]
(4)
A taxable person to whom the provisions of sub-section (1) 11[or, as the case
may be, sub-section (2A)] 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) 11[or sub-section (2A), as the case may be,] 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.
11[Explanation
1 .- For the purposes of computing aggregate turnover of a person for
determining his eligibility to pay tax under this section, the expression
"aggregate turnover " shall include the value of supplies made by
such person from the 1st day of April of a financial year up to the date when
he becomes liable for registration under this Act, but shall not include the
value of exempt supply of services provided by way of extending deposits, loans
or advances in so far as the consideration is represented by way of interest or
discount.
Explanation
2 .- For the purposes of determining the tax payable by a person under this
section, the expression " turnover in State or turnover in Union territory
" shall not include the value of following supplies, namely:-
(i)
supplies from the first day of April of a financial year up to the date when
such person becomes liable for registration under this Act; and
(ii)
exempt supply of services provided by way of extending deposits, loans or
advances in so far as the consideration is represented by way of interest or
discount.]
