GST Composition Rules 2021: CBEC Release GST Composition Rules in new GST Bill 2021. Check Rules of Composition under GST Regime. CBEC release revised Composition Scheme Rules Updated till 1st Feb 2021. In this article you may find complete details for GST Composition Rules, Effective date for composition levy, Rate of tax of the composition levy, Conditions and restrictions for composition levy, Validity of composition levy etc…. Now scroll down below n check more details for “GST Valuation Rules 2021, Determination of Value of Supply under GST”
GST Composition Rules 2021Please Note – The threshold for composition scheme will be increased to Rs. 1.5 crore (from earlier 1 crore)
1. Intimation for composition levy
2. Effective date for composition levy(1) The option to pay tax under section 10 shall be effective from the beginning of the financial year, where the intimation is filed under subrule (3) of rule 3 and the appointed day where the intimation is filed under sub-rule (1) of the said rule.
3. Conditions and restrictions for composition levy(1) The person exercising the option to pay tax under section 10 shall comply with the following conditions, namely:-
- (a) he is neither a casual taxable person nor a non-resident taxable person;
- (b) the goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State,where the option is exercised under sub-rule (1) of rule 3;
- (c) the goods held in stock by him have not been purchased from anunregistered supplier andwherepurchased, hepaysthetax under sub-section (4) of section 9;
- (d) he shall pay tax under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both;
- (e) he was not engaged in the manufacture of goods as notified under clause (e) of sub-section (2) of section 10, during the preceding financial year;
- (f) he shall mention the words ―composition taxable person, not eligible to collect tax on supplies‖ at the top of the bill of supply issued by him; and
- (g) he shall mention the words ―composition taxable person‖ on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.
4. Validity of composition levy(1)The option exercised by a registered person to pay tax under section 10 shall remain valid so long as he satisfies all the conditions mentioned in the said section and under these rules.
5. Rate of tax of the composition levy
|Category of registered persons||Rate of tax|
|Manufacturers, other than manufacturers of such goods as may be notified by the Government||half per cent. of the turnover in the State or Union territory|
|Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II||two and a half per cent. of the turnover in the State or Union territory|
|Any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10||half per cent. of the turnover of taxable supplies of goods and services in the State or Union territory|
|Registered persons not eligible under the composition levy under subsections (1) and (2), but eligible to opt to pay tax under sub-section (2A), of section 10||three per cent. of the turnover of supplies of goods and services in the State or Union territory.|