Section-9. Composition Levy
(1) Notwithstanding anything to the
contrary contained in the Act but subject to subsection
(3) of section 8, on the
recommendation of the Council, the proper officer
of the Central or a State Government
may, subject to such conditions and
restrictions as may be prescribed,
permit a registered taxable person, whose
aggregate turnover in the preceding
financial year did not exceed fifty lakh
rupees, to pay, in lieu of the tax
payable by him, an amount calculated at such
rate as may be prescribed, but not
less than two and a half percent in case of a
manufacturer and one percent in any
other case, of the turnover in a State
during the year:
PROVIDED that no such permission
shall be granted to a taxable person-
(a) who is engaged in the supply of
services; or
(b) who makes any supply of goods
which are not leviable to tax under this Act;
or
(c) who makes any inter-State outward
supplies of goods; or
(d) who makes any supply of goods
through an electronic commerce operator who
is required to collect tax at source
under section 56; or
(e) who is a manufacturer of such
goods as may be notified on the
recommendation of the Council:
PROVIDED FURTHER that no such
permission shall be granted to a taxable person
unless all the registered taxable
persons, having the same PAN as held by the said
taxable person, also opt to pay tax
under the provisions of this sub-section.
(2) The permission granted to a
registered taxable person under sub-section (1) shall
stand withdrawn from the day on which
his aggregate turnover during a financial
year exceeds fifty lakh rupees.
(3) A taxable person to whom the
provisions of sub-section (1) apply shall not collect
any tax from the recipient on
supplies made by him nor shall he be entitled to
any credit of input tax.
(4) If the proper officer has reasons
to believe that a taxable person was not eligible
to pay tax under sub-section (1),
such person shall, in addition to any tax that
may be payable by him under other
provisions of this Act, be liable to a penalty
and the provisions of section 66 or
67, as the case may be, shall apply mutatis
mutandis for
determination of tax and penalty.
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