CGST Rule 2017

CHAPTER I

PRELIMINARY

1.Short title and Commencement.-

(1) These rules may be called the Central Goods and Services Tax Rules, 2017.

(2) They shall come into force with effect from 22nd June, 2017.

2. Definitions.- In these rules, unless the context otherwise requires,-

(a) ―Act‖ means the Central Goods and Services Tax Act, 2017 (12 of 2017);

(b) ―FORM‖ means a Form appended to these rules;

(c) ―section‖ means a section of the Act;

(d) ―Special Economic Zone‖ shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

(e) words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act.

CHAPTER II

COMPOSITION [LEVY]¹

1. Intimation for composition levy.-(1) Any person who has been granted registration on a provisional basis under clause (b) of sub-rule (1) of rule 24 and who opts to pay tax under section 10, shall electronically file an intimation in FORM GST CMP-01, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the appointed day, but not later than thirty days after the said day, or such further period as may be extended by the Commissioner in this behalf:

Provided that where the intimation in FORM GST CMP-01 is filed after the appointed day, the registered person shall not collect any tax from the appointed day but shall issue bill of supply for supplies made after the said day.

(2) Any person who applies for registration under sub-rule (1) of rule 8 may give an option to pay tax under section 10 in Part B of FORM GST REG-01, which shall be considered as an intimation to pay tax under the said section.

(3) Any registered person who opts to pay tax under section 10 shall electronically file an intimation in FORM GST CMP-02, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised and shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub- rule (4) of rule 44 within a period of sixty days from the commencement of the relevant financial year.

[Provided that any registered person who opts to pay tax under section 10 for the financial year 2020-21 shall electronically file an intimation in FORM GST CMP-02, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, on or before 30th day of June, 2020 and shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (4) of rule 44 upto the 31st day of July, 2020.]²

[(3A)Notwithstanding anything contained in sub-rules (1), (2) and (3), a person who has been granted registration on a provisional basis under rule 24 or who has been granted certificate of registration under sub-rule (1) of rule 10 may opt to pay tax under section 10 with effect from the first day of the month immediately succeeding the month inwhich he files an intimation in FORM GST CMP-02, on the common portal eitherdirectly or through a Facilitation Centre notified by the Commissioner, on or before the31st day of March, 2018, and shall furnish the statement in FORM GST ITC-03inaccordance with the provisions of sub-rule (4) of rule 44 within a period of

[one hundred and eighty days]³from the day on which such person commences to pay tax under section 10:

Provided that the said persons shall not be allowed to furnish the declaration inFORM GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.]⁴

(4) Any person who files an intimation under sub-rule (1) to pay tax under section 10 shall furnish the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the said section, electronically, in FORM GST CMP-03, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within a period of [ninety]⁵ days from the date on which the option for composition levyis exercised or within such further period as may be extended by the Commissioner in this behalf.

(5) Any intimation under sub-rule (1) or sub-rule (3) [or sub-rule (3A)]⁶in respect of any place of business in any State or Union territory shall be deemed to be anintimation in respect of all other places of business registered on the same Permanent Account Number.

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 sub-rule (3) of rule 3 and the appointed day where the intimation is filed under sub-rule

(1) of the said rule.

(2) The intimation under sub-rule (2) of rule 3, shall be considered only after the grant of registration to the applicant and his option to pay tax under section 10 shall be effective from the date fixed under sub-rule (2) or (3) of rule 10.

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.

(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.

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.

(2) The person referred to in sub-rule (1) shall be liable to pay tax under sub-section (1) of section 9 from the day he ceases to satisfy any of the conditions mentioned in section 10 or the provisions of this Chapter and shall issue tax invoice for every taxable supply made thereafter and he shall also file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days of the occurrence of such event.

(3) The registered person who intends to withdraw from the composition scheme shall, before the date of such withdrawal, file an application in FORM GST CMP-04, duly signed or verified through electronic verification code, electronically on the common portal.

(4) Where the proper officer has reasons to believe that the registered person was not eligible to pay tax under section 10 or has contravened the provisions of the Act or provisions of this Chapter, he may issue a notice to such person in FORM GST CMP- 05 to show cause within fifteendays of the receipt of such notice as to why the option to pay tax under section 10 shall not be denied.

(5) Upon receipt of the reply totheshowcausenoticeissuedundersub-rule (4) from the registered person in FORM GST CMP-06, the proper officer shall issue an order in FORM GST CMP-07within a period of thirty days of the receipt of such reply, either accepting the reply, or denying the option to pay tax under section 10 from the date of the option or from the date of the event concerning such contravention, as the case may be.

(6) Every person who has furnished an intimation under sub-rule (2) or filed an application for withdrawal under sub-rule (3) or a person in respect of whom an order of withdrawal of option has been passed in FORM GST CMP-07 under sub-rule (5), may electronically furnish at the common portal, either directly or through a Facilitation Centre notified by the Commissioner, a statement in FORM GST ITC- 01containingdetails of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which the option is withdrawn or denied, within a period of thirty days from the date from which the option is withdrawn or from the date of the order passed in FORM GST CMP-07, as the case may be.

(7) Any intimation or application for withdrawal under sub-rule (2) or (3) or denial of the option to pay tax under section 10 in accordance with sub-rule (5) in respect of any place of business in any State or Union territory, shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number.

5. Rate of tax of the composition levy.-The category of registered persons, eligible for composition levy under section 10 and the provisions of this Chapter, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table:-

[

Sl.No Section under which Category of registered Rate of tax

Composition levy is opted persons

(1) (1A) (2) (3)

1. Sub-sections (1) and (2) of section 10 Manufacturers, other than manufacturers of such goods half per cent. of the turnover in as may be notified by the Government the State or Union territory

2. . Sub-sections (1) and (2) of section 10 Suppliers making supplies referred to in clause (b) of two and a half per cent. of the turnover paragraph 6 of Schedule II in the State or Union territory

3. . Sub-sections (1) and (2) of section 10 Any other supplier eligible for composition levy under half per cent. of the turnover

sub-sections (1) and (2) of section 10 of taxable supplies of goods and services

in the State or Union territory

4. Sub-section (2A) of section 10 Registered persons not eligible under the composition three per cent. of the turnover of supplies levy under sub-sections (1) and (2), but eligible of goods and services in the to opt to pay tax under sub-section (2A), of section 10. State or Union territory. ]7.

¹ Substituted for the word [Rules] vide Notf no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019

² Inserted vide Notf no. 30/2020 – CT dt.03.04.2020 wef 31.03.2020

³ Substituted for the word [ninety days] vide Notf no. 03/2018- CT dt. 23.01.2018

⁴ Substituted vide Notf no. 45/2017-CT dt. 13.10.2017. for ―(3A) Notwithstanding anything contained in sub- rules (1), (2) and (3), a person who has been granted registration on a provisional basis under rule 24 or who has applied for registration under sub-rule (1) of rule 8 may opt to pay tax under section 10 with effect from the first day of October, 2017 by electronically filing an intimation in FORM GST CMP-02, on the common portal either directly or through a Facilitation Centre notified by the Commissioner, before the said date and shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub - rule (4) of rule 44 within a period of ninety days from the said date:

Provided that the said persons shall not be allowed to furnish the declaration in FORM GST TRAN-1 after the statement in FORM GST ITC-03 has been furnished.‖ which was inserted vide Notf no. 34/2017-CT dt. 15.09.2017

⁵ Substituted for the word [sixty] with effect from 17.08.2017 vide Notf no. 22/2017 – CT dt. 17.08.2017

⁶Inserted vide Notf no. 34/2017 – CT dt. 15.09.2017

⁷ Substituted vide Notf no. 50/2020-CT dt. 24.06.2020 wef 01.04.2020 for

Sl.No. Category of registered persons Rate of tax

(1) (2) (3)

1. Manufacturers, other than manufacturers of half per cent. of the turnover in the State or Union territory

such goods as may be notified by the Government

2. Suppliers making supplies referred to in clause (b) of two and a half per cent. of the turnover in the State or Union territory

paragraph 6 of Schedule II

3. Any other supplier eligible for composition levyunder section [half per cent. of the turnover of taxable supplies of [goods and services] in 10 and the provisions of this Chapter the State or Union territory.