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CMA Intermediate · Direct and Indirect Taxation · Composition Levy

Which of the following persons is NOT permitted to exercise the option to pay tax under the composition levy, based on the conditions in the CGST Rules, 2017?

A non-resident taxable person cannot opt for composition levy, because the rules require the person to be neither a casual taxable person nor a non-resident taxable person. Paying reverse charge tax and continuing without annual intimation are permitted or required.

  1. AA registered trader who files the option intimation for the financial year
  2. BA registered supplier who is a non-resident taxable personCorrect
  3. CA registered person who continues in the scheme without filing a fresh yearly intimation
  4. DA registered person who pays tax under reverse charge on inward supplies

Explanation

The rules require that the person is neither a casual taxable person nor a non-resident taxable person. Paying tax on inward supplies under section 9(3) or 9(4) is actually a condition of the scheme. Continuing without fresh yearly intimation is expressly allowed.

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