Rule 5 CGST Rules 2017 : Conditions and restrictions for composition levy

By | July 14, 2017
(Last Updated On: July 5, 2018)

Rule 5 CGST Rules 2017

Summary of  Rule 5 CGST Rules 2017

( Rule 5 CGST Rules 2017 explains Conditions and restrictions for composition levy  and is covered in Chapter II   – Composition Rules  : Inserted by the Central Goods and Services Tax Rules, 2017, w.e.f. 22.06.2017 )

Rule 5 CGST Rules 2017

Conditions and restrictions for composition levy

5.(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 an unregistered supplier and where purchased, he pays the tax 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.

(2) The registered person paying tax under Section 10 may not file a fresh intimation every year and he may continue to pay tax under the said section subject to the provisions of the Act and these rules.


 Rule 5 CGST Rules 2017

Also refer CBIC Website Click here 

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