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Denial of composition option by tax authorities and effective date thereof
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....No. GST-12/2018-19 Subject: Denial of composition option by tax authorities and effective date thereof - Reg. Rule 6 of the Karnataka Goods and Services Tax Rules, 2017 (hereinafter referred to as the "KGST Rules") deals with the validity of the composition levy. As per the said rule, the option exercised by a registered person to pay tax under the composition scheme shall remain valid....
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.... the composition scheme where action has been initiated by the tax authorities to deny such option to the composition taxpayer. Further, clarification has been sought regarding the follow up action to be taken by the tax authorities when the composition option is denied to the taxpayer retrospectively. In order to clarify these issues and to ensure uniformity in the implementation of the provision....
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....in seven days of the occurrence of such event. 4. As per sub-rule (4) of rule 6 of the KGST Rules, where the proper officer has reasons to believe that the registered person was not eligible to pay tax under section 10 of the KGST Act or has contravened the provisions of the KGST Act or the KGST Rules, he may issue a notice to such person in FORM GST CMP-05 to show cause as to why the option to p....
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.... prior to the commencement of the financial year in which such intimation/application for withdrawal is being filed. If at any stage it is found that he has contravened any of the provisions of the KGST Act or the KGST Rules, action may be initiated for recovery of tax, interest and penalty. In case of denial of option by the tax authorities, the effective date of such denial shall be from a date,....