Conditions and Restrictions for Composition Levy – Rule 5 of CGST Rules :
Conditions and Restrictions for Composition Levy: Person opting for Composition shall comply with the following –
- Neither a casual taxable person nor a non-resident taxable person
- The goods held in stock by him on the appointed day have not been
o purchased in the course of inter-State trade or commerce, or
o imported into India, or
o received from his branch situated outside the State or from his agent or principal outside the State
- Goods held in stock have not been purchased from an unregistered person and where purchased tax has been paid under reverse charge
- He shall pay tax under reverse charge on inward supplies received from unregistered persons
- He was not engaged in the manufacture of notified goods during the preceding financial year
- He shall mention words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him
- He shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his place of business and at every additional place or places of business
- Registered person who has opted for Composition may not file fresh intimation every year and may continue to pay tax under composition