The Synthetic & Rayon Textiles Export Promotion Council

CBIC clarifies issues regarding exercise of option to pay tax under Composition Scheme

Circular No.ES/9/2019-20                                                                                          April 8, 2019

To: Members of the Council

Sub.:   CBIC clarifies issues regarding exercise of option to pay tax under Composition Scheme

Dear Member,

Kindly refer to Council’s earlier Circular No. ES/ 411 /2018-19  dated 11th March, 2019 in which CBIC had issued Notification No. 2/2019- Central Tax (Rate) dated 7th March, 2019 notifying about the availability of a Composition Scheme for Suppliers of Services (or Mixed Suppliers) with a Tax Rate of 6% (3% CGST +3% SGST) having an Annual Turnover in the preceding Financial Year up to Rs 50 lakhs w.e.f. 1st April, 2019.

Further, Council had issued Circular No.ES/436/2018-19 dated 30th March, 2019 in which CBIC had issued Notification No. 9/2019- Central Tax (Rate) dated 29th March, 2019 by amending  Notification No. 02/2019- Central Tax (Rate) dated 7th March, 2019 to provide application of Composition rules to persons opting to pay tax

Now, CBIC has issued Circular No. 97/16/2019- GST dated 5th April, 2019 clarifying issues regarding exercise of option to pay tax under Composition Scheme.

  1. A registered person who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, may do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 30th April, 2019. Such person shall also furnish a statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (3) of rule 3 of the said rules.

  1. Any person who applies for registration and who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, if eligible, may do so by indicating the option at serial no. 5 and 6.1 (iii) of FORM GST REG-01 at the time of filing of application for registration.

  1. The option of payment of tax by availing the benefit of the said notification in respect of any place of business in any State or Union territory shall be deemed to be applicable in respect of all other places of business registered on the same Permanent Account Number.

  1. The option to pay tax by availing the benefit of the said notification would be effective from the beginning of the financial year or from the date of registration in cases where new registration has been obtained during the financial year.

The provisions contained in Chapter II of the said Rules shall mutatis mutandis apply to persons paying tax by availing the benefit of the said notification, except to the extent specified in para 2 above.

Members may kindly make a note of the above.

Thanking you,            

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR