Rule 7 of CGST Rules 2017: Tax Rate under Composition Levy

Provisions under Rule 7 of the Central Goods and Services Tax (CGST) Rules, 2017 relating to “Tax Rate under Composition Levy”, are as under:

CGST Rule 7: Rate of tax of the Composition Levy (Chapter-II: Composition Levy Rules) 

The category of registered persons, eligible for composition levy under section 10 and the provisions of this Chapter, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table:-

Sl. No. (1) Section under which composition levy is opted (1A)Category of registered persons (2)Rate of tax (3)
1Sub-sections (1) and (2) of section 10Manufacturers, other than manufacturers of such goods as may be notified by the Governmenthalf per cent. of the turnover in the State or Union territory
2Sub-sections (1) and (2) of section 10Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule IItwo and a half per cent. of the turnover in the State or Union territory
3Sub-sections (1) and (2) of section 10Any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10half per cent. of the turnover of taxable supplies of goods and services in the State or Union territory
4Sub-section (2A) of section 10Registered persons not eligible under the composition levy under subsections (1) and (2), but eligible to opt to pay tax under sub-section (2A), of section 10three per cent. of the turnover of taxable supplies of goods and services in the State or Union territory

Amendments History:

1. Composition tax rates amended with effect from 1 Jan. 2018 vide the Central Goods and Services Tax (Amendment) Rules, 2018 Notification No. 03/2018 Central Tax dt. 23 Jan. 2018, as under:
(a) in Sl. No. 1 & column (3) of the Old Table below, for the words “one per cent.”, the words “half per
cent. of the turnover in the State or Union territory” substituted;
(b) in Sl. No. 2 & column (3) of the Old Table below, for the words “two and a half per cent.”, the words “two and a half per cent. of the turnover in the State or Union territory” substituted;
(c) in Sl. No. 3 & column (3) of the Old Table below, for the words “half per cent.”, the words “half per cent. of the turnover of taxable supplies of goods in the State or Union territory” substituted.

2. In Sl. No. 3 & column (3) of the Old Table below, the words, “goods and services” substituted for the word “goods” w.e.f. 1 Feb. 2019 vide the Central Goods and Services Tax (Amendment) Rules, 2019 Notification 3/2019 Central Tax dt. 29 Jan. 2019.

3. Old Table below containing the rates of tax of composition levy was substituted with the New Table above, w.e.f. 1st April 2020, vide the Central Goods and Services Tax (Seventh Amendment) Rules, 2020 Notification 50/2020 Central Tax dt. 24 June 2020.

4. In Sl. No. 3 & column (3) of the New Table above, the words, “turnover of taxable” substituted for the words “turnover of” vide Corrigendum to Notification 50/2020 Central Tax dt. 24 June 2020.

Old Table of Composition Levy Rates (which was substituted with New Table above)

Sl. No.
(1)
Category of registered persons
(2)
Rate of tax
(3)
1Manufacturers, other than manufacturers of such goods as may be notified by the Governmentone per cent half per cent of the turnover in the State or Union territory
2Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule IItwo and a half per cent two and a half per cent of the turnover in the State or Union territory
3Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter these ruleshalf per cent half per cent of the turnover of taxable supplies of goods goods and services in the State or Union territory

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It may be noted that the above information is based on Updated CGST Rules 2017 (amended upto 5th May 2020), as compiled/ shared by CBIC (i.e. as notified/ amended upto 5th May 2020 by the CBIC). However, for detailed/ official information and/ or subsequent updates, please refer relevant Notifications. E&OE

Further, it may be noted that CGST Rules 1 to 26 (pertaining to Chapters on items, like 'Preliminary', 'Composition' and 'Registration') were initially notified by CBIC vide Notification No. 3/2017 Central Tax dt. 19 June 2017, applicable w.e.f. 22 June 2017 (or as may be specified in respective Rules).

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