Opt for Composition Levy

Q1. Can I opt for the Composition Levy?

You can opt for the Composition Levy if you are a regular taxpayer with an aggregate annual domestic PAN-based turnover as specified time to time.

However, you cannot opt for the Composition Levy if you are/you make:

  • engaged in the supply of services

  • any supply of goods which are not liable to be taxed under this Act

  • inter-state outward supplies of goods

  • supplies through electronic commerce operators who are required to collect tax under section 56.

  • a manufacturer of notified goods

  • a casual dealer

  • a Non-Resident Foreign Taxpayer

  • a person registered as Input Service Distributor (ISD)

  • a person registered as TDS Deductor/Tax Collector

Q2. How do I opt for the Composition Levy?

To opt for the Composition Levy on the GST Portal, perform the following steps:

  1. Log in to the Taxpayers’ Interface
  2. Go to Services > Registration > Application to Opt for Composition Levy
  3. Fill the form as per the form specification rules and submit
Q3. When can I opt for the Composition Levy?

In order to avail this scheme, you need to file an online application to Opt for Composition Levy with the tax authorities. Taxpayers who can opt for this scheme can be categorized as below:

  1. Migrated Taxpayers: Any taxpayer who are migrated from earlier laws and who have been granted provisional registration would file an application for composition within 30 days prior to or after the appointed day.

  2. New Taxpayers: Any person who becomes liable to register under GST Act, after the appointed day, shall file his option to pay composition amount in the Application for New Registration in Form GST REG-01.

  3. Existing Taxpayers: Any taxpayer who is registered as normal tax payer under GST regime shall file an application to opt for Composition Levy at least 7 days prior to the commencement of financial year for which the option to pay tax under the aforesaid section is exercised.

Q4. Is it mandatory to file a Stock Intimation? How do I file a Stock Intimation?

Yes, it is mandatory to file a Stock Intimation.

In addition to filing the application to opt for Composition Levy, you would also require to file a Stock Intimation to furnish the details of stock including inward supply of goods from unregistered persons, held by you on the day preceding the date from which you opt to pay the composition amount. You are required to file Stock Intimation details within 30 days of the date from which Composition Levy is sought.

The application to opt for Composition Levy is not subject to approval by the tax authorities. On filing of the application, you are marked as a composition taxpayer in the system and consequential changes are made in the system. However, in case it is found that you were not eligible for the Composition Levy or have not filed Stock Intimation, you would be compulsorily pushed out of the Composition Levy by initiating appropriate proceedings.

Stock Intimation filed by you is not subject to processing by State & Centre Tax Authorities. However, in case it is found out by the tax authorities that the particulars of stock and ITC reversal furnished in the Stock Intimation are incorrect, the tax authorities can initiate appropriate demand proceedings from back office against you.

Q5. Can I save the Application to Opt for Composition Levy?

Yes, the application can be saved for up to 15 days from the date of initiation after which it will be purged by the system.

Saved applications can be accessed using the My Saved Applications functionality available in the Taxpayers’ Interface.

Q6. I am a migrated and newly registered taxpayer. I am not able to opt for Composition Levy for financial year 2017-18. Why?

As per GST Act, migrated taxpayers were permitted to opt for Composition Levy within 30 days from the Appointed Date. But later, the date for opting for Composition Levy was extended to 16th Aug’ 2017.

GST council had further extended the facility to opt for Composition Levy by migrated taxpayer and newly registered taxpayers, for current financial year from 15th Sep'17 to 30th Sep’17 and the composition shall become effective from 01st Oct’17.

Since the date to apply for Composition Levy for the current financial year 2017-18, as prescribed by Government has lapsed, you cannot opt for Composition Levy now.