Composition levy: simplified tax payment option for small registered suppliers with eligibility limits and compliance conditions.

Registered persons with aggregate turnover not exceeding fifty lakh rupees may opt for a composition levy, paying prescribed rates by class of supplier instead of normal tax; the Government may raise the eligibility ceiling on Council recommendation. Exclusions include certain service providers, inter State suppliers, supplies not leviable to tax, supplies through specified e commerce operators, and notified manufacturers. Joint PAN holders must opt collectively. The option lapses on exceeding the turnover threshold; composition taxpayers cannot collect tax or claim input tax credit. Ineligible payment under the scheme attracts tax determination and penalties under the Act.

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