Rule 5 - Conditions and restrictions for composition levy

Composition levy eligibility limited by stock origin, supplier registration, specified manufacture and mandatory billing and signage requirements.

Opting for the composition levy under section 10 requires that the taxpayer is not a casual or non resident taxable person; stock on the appointed day must not be acquired by inter State purchase, import, or from out of State branches/agents; stock bought from unregistered suppliers attracts tax under inward supply provisions; tax on inward supplies must be paid under section 9(3) or 9(4); the taxpayer must not have carried out specified notified manufacturing in the preceding year; and specified wording must appear on bills of supply and on prominent signage. A registered composition taxpayer may continue without fresh annual intimation, subject to the Act and rules.