CBIC clarifies the issue regarding exercise of option to pay tax

Apr 08, 2019 | by Avantis RegTech Legal Research Team


The Central Board of Indirect taxes and Customs (CBIC) on April 05, 2019, has clarified that a registered person who wants to opt for payment of central tax @ 3% by availing the benefit of the Notification No. 02/2019-Central Tax (Rate) dated March 07, 2019, may do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest by 30th April, 2019.

CBIC had issued a Notification dated March 07, 2019 which prescribes rate of central tax of 3% on first supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the April 01 in any financial year, by a registered person whose aggregate annual turnover in the preceding financial year was fifty lakh rupees or below. The Notification, as amended by Notification No. 09/2019-Central Tax (Rate) dated March 29, 2019, provides that Central Goods and Services Tax Rules, 2017, as applicable to a person paying tax under section 10 of the Central Goods and Services Tax Act, 2017 shall, mutatis mutandis, apply to a person paying tax under the said notification.

In order to clarify the issue and to ensure uniformity in the implementation of the provisions of the law across field formations, CBIC clarifies the issues raised as below:

i.a registered person who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, may do so by filing intimation in the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy”, latest by April 30, 2019. Such person shall also furnish a statement in FORM GST ITC03.

ii.any person who applies for registration and who wants to opt for payment of central tax @ 3% by availing the benefit of the said notification, if eligible, may do so by indicating the option in FORM GST REG-01 at the time of filing of an application for registration.

iii.the option of payment of tax by availing the benefit of the said notification in respect of any place of business in any State or Union territory shall be deemed to be applicable in respect of all other places of business registered on the same Permanent Account Number. (iv) the option to pay tax by availing the benefit of the said notification would be effective from the beginning of the financial year or from the date of registration in cases where new registration has been obtained during the financial year.

[Circular No. 97/16/2019-GST]

Click here to download the Circular.


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