Composition levy: simplified tax option disallows input tax credit and prohibits collecting tax from recipients.

Composition levy allows a registered person below the turnover threshold to opt to pay a prescribed flat amount instead of regular tax, subject to prescribed rates and conditions; the option lapses if turnover exceeds the threshold. Eligible optants cannot collect tax from recipients or claim input tax credit. Ineligible persons who nonetheless paid under the scheme are subject to tax and penalty assessment under the Act.

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