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CMA Intermediate · Direct and Indirect Taxation · Composition Levy

Which of the following persons is disqualified from opting for composition levy under the conditions in rule 5 of the CGST Rules, 2017?

A non-resident taxable person is disqualified, because the rule requires the composition person to be neither a casual taxable person nor a non-resident taxable person. The other cases are permitted or are actually required conditions of the scheme.

  1. AA registered trader who pays tax under reverse charge on inward supplies from unregistered suppliers
  2. BA registered trader who continues in the scheme without filing a fresh intimation each year
  3. CA non-resident taxable person supplying goods in IndiaCorrect
  4. DA registered manufacturer not engaged in notified goods in the preceding year

Explanation

Rule 5(1)(a) requires that the person be neither a casual taxable person nor a non-resident taxable person. Paying tax on inward supplies is a required condition, not a bar. Rule 5(2) lets a person continue without annual intimation.

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