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CMA Intermediate · Direct and Indirect Taxation · Composition Levy

Mehta Traders obtained fresh GST registration with the date of registration fixed as 12 August. It had filed an intimation under sub-rule (2) of rule 3 to pay tax under section 10. Under rule 4, how is this intimation treated?

The intimation is considered only after registration is granted, and the option becomes effective from the date fixed under sub-rule (2) or (3) of rule 10. Rule 4(2) therefore ties the composition option of a new registrant to the registration date.

  1. AIt is considered only after registration is granted, and the option is effective from the date fixed under sub-rule (2) or (3) of rule 10Correct
  2. BIt is effective from 1 April of that financial year irrespective of registration date
  3. CIt is effective from the date on which the intimation was filed, even before registration is granted
  4. DIt is effective only from the beginning of the next financial year

Explanation

Rule 4(2) provides that an intimation under sub-rule (2) of rule 3 is considered only after the grant of registration. The option is then effective from the date fixed under sub-rule (2) or (3) of rule 10, i.e. the registration date as fixed. The 1 April and next-year choices apply to other situations.

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