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CMA Intermediate · Direct and Indirect Taxation · Composition Levy

Mehta Foods, a composition dealer registered on one PAN in State A and State B, withdraws from the scheme for its State A place of business only. Which statement follows from the CGST Rules, 2017?

The withdrawal for the State A place is deemed to be an intimation for all other places of business registered on the same PAN, so the State B place cannot stay in composition. Composition is therefore effectively PAN-wide in withdrawal and denial.

  1. AThe withdrawal applies only to State A and the State B place continues under composition
  2. BThe withdrawal is deemed an intimation for all other places of business registered on the same PANCorrect
  3. CThe State B place may opt to continue if its own turnover is small
  4. DThe withdrawal takes effect only after the State B officer approves it

Explanation

Rule 6(7) treats an intimation, withdrawal application or denial of option for any place of business in a State or Union territory as deemed to apply to all other places of business registered on the same PAN. Hence the State B place cannot continue separately under composition.

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