Composition of Tax
(1) (a) The State Government may, by a notification in the Official Gazette, in lieu of the amount of tax payable under this Act; provide for a Scheme of Composition of Tax Payable: by such dealers or class of dealers, or dealers who are engaged in the business of reselling at retail of any goods, or dealers who are liable to pay tax on sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; subject to such conditions and restrictions as may be specified and as prescribed.
Provided the scheme of Composition of Tax shall be available to only such Dealer(s), other than the works contractors, whose gross turnover does not exceeds Rs. 50 lakhs in a year.
(b) For the purpose of this Section, a dealer shall be considered to be engaged in the business of selling at retail, if 9/10th of his turnover of sales consists of sales made to such persons who are not dealers, and in the circumstances, if any question arises as to, whether any particular dealer is a retailer or not, the question shall be referred to the Joint Commissioner, who shall after hearing the dealer, if necessary, decide the question to this effect. The order made by the Joint Commissioner shall be final.
(c) Nothing in this sub-section shall apply to a dealer who is a Manufacturer, or who is an Importer of goods into the State, or who sells liquor: including liquor imported from outside of India, or Indian Made Foreign Liquor or Country Liquor.
(d) The provisions of Section 44 shall not apply to such contractors, who have been granted permission to pay tax by way of composition; so long they comply with all the terms and conditions as specified in the Notification and prescribed in Rule 23, read with sub-rule (7) of Rule 14.
(2) The Rate of Tax applicable under the Composition scheme referred in this Section shall not be exceeding 8%, on the Gross Annual Turnover and no Input Tax Credit shall be admissible to such dealers.
(3) Where the registered dealer is permitted to pay tax by way of Composition Scheme under sub-section (1) of this Section, the provisions of Section 29, 35 and 36 shall not apply to him, so long as he complies with all the terms and conditions as specified in this Section and as prescribed.
(4) Any dealer eligible for Composition of Tax under sub-section (1) may apply, to the Prescribed Authority in the prescribed manner, to exercise his option and he shall pay such amount due, and furnish a Return in such manner as may be prescribed.
Provided that once the dealer elects the option to pay tax under this Section, the option may be reversed only after the end of the year for which the option is made, by an Application to the Prescribed Authority, within such time and in such manner as may be prescribed.
Provided further, such dealer shall not be allowed to issue Tax Invoice, and shall not be allowed to collect any amount, by way of Tax under this Act.