Composition of Tax

Number: 
NOTIFICATION No. VAT-1505/CR-105/Taxation-1
Notification Date: 
Wednesday, June 1, 2005

NOTIFICATION No. VAT-1505/CR-105/Taxation-1, Dated 1st June, 2005

In exercise of the powers conferred by section 42 of the Maharashtra Value Added Tax Act, 2002, (Mah. IX of 2005) and in supersession of the Government Notification, Finance Department No. VAT-1505/ CR-105/ Taxation-1, dated 1st April 2005, Government of Maharashtra hereby subject to the conditions specified in column (5) against each class of dealers specified in column (2) of the Schedule appended hereto, provides for composition of tax payable by the said dealers on their sales specified in column (3) of the said Schedule as specified in column (4) of the said Schedule.

SCHEDULE

 

Serial No. Class or classes of dealers Classes of Sales or Purchases Composition Amount Conditions
(1) (2) (3) (4) (5)
(1) Restaurants, Eating house, Refreshment room, Boarding establishment, Factory canteen Clubs, Hotels and Caterers Aggregate of sales of food and non-alcoholic drinks, not being food, alcoholic and non-alcoholic drinks served for consumption in any restaurant or hotel or any part thereof having gradation of "Four Star " and above or supplied by such restaurant, or hotel, ......................................................................

(a)   served for consumption at or in the immediate vicinity of any restaurant, hotel, eating house, refreshment room, boarding establishment, factory canteen or in any club or

(b)   supplied by way of counter-sale  by such restaurant, hotel, eating house, refreshment room or boarding establishment or club, or

(c)   served for consumption at any place other than a restaurant,  hotel, eating house, refreshment room  boarding establishment factory canteen, or any club by a caterer.

 

 

5 per cent. of the turnover of sales in the case of a registered dealer and 10 per cent of the turnover of sales in the case of an unregistered dealer.

Explanation:- Where the dealer is also serving alcoholic drinks, the tax payable on sales of alcoholic drinks will not be compounded under this notification but the tax payable on sales by such dealer of food and non-alcoholic drinks will be allowed to be compounded under this notification.

(i) The claimant dealer shall not be entitled to claim any set off under the Maharashtra Value Added Tax Rules, 2005, in respect of the purchases corresponding to any goods which are sold or resold or used in packing of goods referred to in column (3) of this entry.

(ii) The claimant dealer shall not collect tax including composition amount separately in the bill, cash memo or invoice issued to the customer.

(iii) The claimant dealer shall apply in Form -2 in respect of caterers and in Form - 1 in case of other dealers referred to in column (2) of this entry, to the Joint Commissioner of Sales Tax (Registration) in case of the dealers in Mumbai and in other cases, to the Joint Commissioner of Sales Tax (VAT Administration) concerned;

(iv) The Claimant dealer is not eligible to issue "Tax Invoice" in respect of sales of goods referred to the column (3) of this entry.

(v) If the claimant dealer opts for the composition scheme on or after the 1st July 2009 but on or before 30th September 2009, then he shall be eligible to pay tax under the composition scheme with effect from the 1st July 2009.

(vi) In case of a newly registered dealer, if he applies for composition scheme within one month from the date of grant of registration certificate, then option to join composition would be effective from date of registration.

(vii) Subject to conditions (iii), (v) and (vi), if the dealer opts for composition at any time after the 1st April of any year then the option shall be effective only from the beginning of the next financial year.

(2) Bakers Aggregate of Sales of bakery products which are manufactured by the baker himself 4 per cent. of the first fifty lakh rupee of the total turnover of sales of goods referred to in column (3) of this entry  and goods imported out of Maharashtra State,  if any, including bread in loaf, rolls, or in slices, toasted or otherwise, in the case of a registered dealer and 6 per cent. of the first fifty lakh rupee of the total turnover of sales of goods referred to in column (3) of this entry and goods imported out of Maharashtra State, if any including bread in loaf, rolls, or in slices, toasted or otherwise, in the case of an unregistered dealer. (i) The claimant dealer shall be certified by the Joint Commissioner for the purpose of claiming benefit under this entry

(ii)  The claimant dealer shall not be entitled to claim any set off under the Maharashtra Value Added Tax Rules, 2005, in respect of the purchases corresponding to any goods which are sold or resold or used in packing of goods referred to in column (3) of this entry.

 (iii) The turnover of sales of bakery products including bread has not exceeded rupees fifty lakh in the year previous to which the composition is availed and if the dealer was not  liable for registration under the Bombay Sales Tax Act, 1959 or as the case may be under  the Maharashtra Value Added Tax Act, 2002, in the immediately preceding  year, there is no previous year then he shall be entitled to claim the benefit of the scheme in respect of the first fifty lakh rupees of the total turnover of sales in the current year.

(iv) The claimant dealer shall apply in the 'Form-3' appended to the notification to the Joint Commissioner of Sales Tax (registration) in case of dealers in Mumbai and in the other cases to the Joint Commissioner of Sales Tax (Vat Administration), concerned.

(iv-a) The option to Join Composition would be effective from the date of registration, if the dealer applies for composition scheme at the time of registration.

(iv-b) if the dealer opts for composition scheme from 1st April, 2011, he shall apply on or before the 30th June, 2011.

(iv-c) If the dealer opts for composition shall be effective only from the beginning of the next financial year.

(v) Subject to condition (iii),  if the option to join the composition scheme is exercised, in any year then it can be changed only at the beginning of the next year.

(vi) The claimant dealer shall not be eligible to issue "Tax Invoice"  in respect of sales of goods referred to in column (3) of this entry.

(vii) The claimant dealer shall not be eligible to recover the composition amount from any customer separately.

(3) Retailers Total turnover of sales made by a registered dealer, who is a retailer as provided in section 41, of any goods excluding the turnover of resales  if any, effected by him, of the following goods:-

1) Foreign liquor, as defined in rule 3(6)(1) of the Bombay Foreign Liquor Rules, 1953.

2) Country liquor, as defined in Maharashtra Country Liquor Rules, 1973.

3) Liquor imported from any place outside the territory of India as defined, from time to time, in rule 3(4) of the Maharashtra Foreign Liquor (Import and Export) Rules, 1963.

5) Motor Spirits notified by the State Government under sub-section (4) of section 41 of the Act.

(6) Furnishing fabrics notified by the State Government under entry 101 of SCHEDULE 'C' appended to the Act.

The composition amount shall be as specified below, calculated on the,-

 Excess, if any, of the total turnover of sales, including turnover of sales of tax -free goods but excluding  liquor,  and Motor Spirits  referred to in column (3) of this entry , in respect of any six monthly period over the turnover of purchases including turnover of purchases of tax free goods,  but excluding  liquor,  Motor Spirits  referred to in column (3) of this entry , in respect of the said six month period.  The turnover of purchases shall be increased by the amount of tax collected by the vendor of the retailer separately from the retailer.

1) at the rate of 5 per cent for the retailers whose aggregate of the turnover of sales of goods, covered by schedule A and goods taxable at the rate of 5 per cent., if any,  is more than 50 per cent. of the total turnover of sales; excluding the turnovers of liquor and motor spirits referred to columns 3 of this entry

(1A) at the rate of 6 per cent for the retailers whose at least ¾th of the turnover of sales of goods is of drugs covered by the entries 29 and 29A of SCHEDULE C appended to the Act.

2) at the rate of 8 per cent. in any other case.

(i) The selling dealer does not collect tax separately in respect of the sales specified in column 3.

(ii) The claimant dealer shall not be entitled to claim any set off under the Maharashtra Value Added Tax Rules, 2005, in respect of the purchases corresponding to any goods which are sold or resold or used in packing of goods referred to in column (3) of this entry.

(iii) The turnover of sales of goods specified to in column (3) of this entry has not exceeded rupees fifty lakh in the year previous to which the composition is availed of and if the dealer was not liable for registration under the Bombay Sales Tax Act, 1959 or, as the case may be under the Maharashtra Value Added Tax Act, 2002, in the immediately preceding year, then he shall be entitled to claim the benefit of the scheme in respect of the first fifty lakh rupees of the total turnover of sales in the current year.

(iv) The turnover of purchases referred to in column (3) shall be reduced by the amount of every credit of any type received by the selling dealer from any of his vendors whether or not such credit is in respect of any goods purchased by the selling dealer from the said vendor.

(v) In respect of the six monthly period starting on the 1st April 2005, for calculating the excess referred to in column (4), 5/6th of the turnover of sales of the six monthly period is to be considered instead of the entire turnover of sales for that period.

(vi) The claimant dealer shall apply in the 'Form-4' appended to this notification for exercising the option to pay tax under the composition scheme. The application should be made to the assessing authority who was in charge of the case on the 31st March 2005 before the 15th June 2005 or as the case may be, to the registering authority at the time of application for Registration Certificate under the Act.

(vii) Subject to condition (iii), if the option to join the composition scheme is exercised, in any year then it can be changed only at the beginning of the next year.

(viii) The claimant dealer shall not be eligible to recover composition amount from any customer separately.  

(ix)  The claimant dealer is not a manufacturer or importer.

(x) The taxable goods resold are purchased from registered dealers.

(xi) Purchases of tax free goods may be from registered dealers as well as from unregistered dealers.

xii) Any other purchases from unregistered dealers are meant only for packing of goods resold.

(4) Dealers in Second-hand Motor Vehicles or tractors Sales of second-hand motor vehicle or tractors whether or not sold after reconditioning or refurbishing by a registered dealer whose principal business is of buying or selling of motor vehicles or tractors. The composition amount shall be calculated @ 12.5% on 15% of the sale price of the vehicle.  (i) Claimant dealer shall be certified by the Joint Commissioner of Sales Tax for the purpose of this entry.

(ii) The selling dealer proves to the satisfaction of the Commissioner that the Entry Tax in respect of the said vehicle has been paid, or that the said vehicle is registered at the time of purchase under the Central Motor Vehicle Rules, 1989 in the State of Maharashtra and accordingly, registration mark of this State was allotted to the said vehicle.

(iii) The claimant dealer shall not be eligible to claim set-off of tax paid or payable or, and of entry tax paid or payable, if any, on purchases of second-hand motor vehicle or tractors referred to in column(3) of this entry.

(iv) The claimant dealer shall apply in the 'Form-5' appended to the said notification for exercising the option to pay tax under the composition scheme to the Joint Commissioner of Sales Tax (Registration) in case of the dealer in Mumbai and in other cases, to the concerned Joint Commissioner of Sales tax (VAT Administration).

(v) The claimant dealer shall not  issue "Tax Invoice" in respect of sales of goods referred to in column (3) of this entry.

(vi) The claimant dealer shall not be entitled to recover composition amount from any customer separately. 

 

Form-1

(See section 42 of the Maharashtra Value Added Tax Act, 2002)

 

Intimation for choosing an option to pay tax under the scheme of composition under the Maharashtra Value Added Tax Act, 2002

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  
Class of dealers Restaurant / Club / Hotel

I........................................... of......................................................... am a dealer registered under the Bombay Sales Tax Act, 1959 and I continue to be registered under Maharashtra Value Added Tax Act, 2002.

In terms of the provisions of section 42 of the Maharashtra Value Added Tax Act, 2002, I confirm that I am eligible to opt for payment of tax under the composition scheme and accordingly, I hereby communicate that I would be paying tax under the composition option with effect from 1st of April 2005. Further, I hereby undertake to abide by the terms and conditions governing the composition scheme.

I am aware that as a composition dealer, I am not eligible to

- claim set-off of sales tax paid on purchases corresponding to any goods which are sold or resold or used in the packing of goods referred to in column (3) of the entry no (1) of this notification,

- eligible to recover the composition amount from my customers separately and

- to issue 'Tax Invoice' in respect of sales of goods referred to in column (3) of the entry no. (1) of this notification.

- change over to a normal VAT dealer till the end of the financial year.

 

 

Place Signature  
Date Status of the signatory  

  

For office use only

  

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

ACKNOWLEDGEMENT

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

Received intimation for choosing an option to pay tax under the scheme of composition.

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

 

Please note your RC number under the MVAT Act now reads as:  

 

Please use this new number in all the documents such as invoices purchase orders, and the returns, chalans etc. under this Act
-

-

Form-2

(See section 42 of the Maharashtra Value Added Tax Act, 2002)

Intimation for choosing an option to pay tax under the scheme of composition under the Maharashtra Value Added Tax Act, 2002

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  
Class of dealers Caterer

I ................................................ of ........................................................... am a dealer registered under the Bombay Sales Tax Act, 1959 and I continue to be registered under Maharashtra Value Added Tax Act, 2002.

 

In terms of the provisions of section 42 of the Maharashtra Value Added Tax Act, 2002, I confirm that I am eligible to opt for payment of tax under the composition scheme and accordingly, I hereby communicate that I would be paying tax under the composition option with effect from 1st of April 2005. Further, I hereby undertake to abide by the terms and conditions governing the composition scheme.

 

I am aware that as a composition dealer, I am not eligible to

- claim set-off of sales tax paid on purchases corresponding to any goods which are sold or resold or used in the packing of goods referred to in column (3) of the entry no (1) of this notification,

- eligible to recover the composition amount from my customers separately and

- to issue ' Tax Invoice ', in respect of sales of goods referred to in column (3) of the entry no. (1) of this notification

- change over to a normal VAT dealer till the end of the financial year.

 

 

Place Signature  
Date Status of the signatory  

  

 

For office use only

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

ACKNOWLEDGEMENT

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

Received intimation for choosing an option to pay tax under the scheme of composition.

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

 

 

 

Please note your RC number under the MVAT Act now reads as:  

 

Please use this new number in all the documents such as invoices purchase orders, and the returns, chalans etc. under this Act

Form-3

(See section 42 of the Maharashtra Value Added Tax Act, 2002)

 Intimation for choosing an option to pay tax under the scheme of composition under the Maharashtra Value Added Tax Act, 2002

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  
Class of dealers Baker

 

I ................................................ of ................................................... am a dealer registered under the Bombay Sales Tax Act, 1959 and I continue to be registered under Maharashtra Value Added Tax Act, 2002.

 

In terms of the provisions of section 42 of the Maharashtra Value Added Tax Act, 2002, I confirm that I am eligible to opt for payment of tax under the composition scheme and accordingly, I hereby communicate that I would be paying tax under the composition option with effect from 1st of April 2005. Further, I hereby undertake to abide by the terms and conditions governing the composition scheme.

 

I am aware that as a composition dealer, I am not eligible to

- claim set-off of sales tax paid on purchases corresponding to any goods which are sold or resold or used in the packing of goods referred to in column (3) of the entry no (2) of this notification,

- eligible to recover the composition amount from my customers separately and

- to issue " Tax Invoice ", in respect of sales of goods referred to in column (3) of the entry no. (2) of this notification

- change over to a normal VAT dealer till the end of the financial year.

 

 

Place Signature  
Date Status of the signatory  

 

 

For office use only

 

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

-

 

ACKNOWLEDGEMENT

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

Received intimation for choosing an option to pay tax under the scheme of composition.

 

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

 

Please note your RC number under the MVAT Act now reads as:  

 

Please use this new number in all the documents such as invoices purchase orders, and the returns, chalans etc. under this Act

Form-4

(See section 42 of the Maharashtra Value Added Tax Act, 2002)

 

Intimation for choosing an option to pay tax under the scheme of composition under the Maharashtra Value Added Tax Act, 2002

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  
Class of dealer Retailer

I ................................................ of ................................................ am a dealer registered under the Bombay Sales Tax Act, 1959 and I continue to be registered under Maharashtra Value Added Tax Act, 2002.

 

In terms of the provisions of section 42 of the Maharashtra Value Added Tax Act, 2002, I confirm that I am eligible to opt for payment of tax under the composition scheme and accordingly, I hereby communicate that I would be paying tax under the composition option with effect from 1st of April 2005. Further, I hereby undertake to abide by the terms and conditions governing the composition scheme.

 

I am aware that as a composition dealer, I am not eligible to

- claim set-off of sales tax paid on purchases corresponding to any goods which are sold or resold or used in the packing of goods referred to in column (3) of the entry no (3) of this notification,

- eligible to recover the composition amount from my customers separately and

- to issue ' Tax Invoice ' in respect of sales of goods referred to in column (3) of the entry (3) of this notification,

- change over to a normal VAT dealer till the end of the financial year.

 

I further declare that I am not manufacturer or importer or not purchasing any goods from a registered dealer whose sales of the said goods are not liable to tax by virtue of the provisions contained in sub-section (1) of section 8 of the Act.

 

 

Place Signature  
Date Status of the signatory  

  

 

 

For office use only

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

-

ACKNOWLEDGEMENT

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

Received intimation for choosing an option to pay tax under the scheme of composition.

 

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

 

Please note your RC number under the MVAT Act now reads as:  

 

Please use this new number in all the documents such as invoices purchase orders, and the returns, chalans etc. under this Act

Form-5

(See section 42 of the Maharashtra Value Added Tax Act, 2002)

 

Intimation for choosing an option to pay tax under the scheme of composition under the Maharashtra Value Added Tax Act, 2002

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  
Class of dealers Dealer in Second-hand Motor Vehicle or tractors

I ............................................. of ............................................................ am a dealer registered under the Bombay Sales Tax Act, 1959 and I continue to be registered under Maharashtra Value Added Tax Act, 2002.

 

In terms of the provisions of section 42 of the Maharashtra Value Added Tax Act, 2002, I confirm that I am eligible to opt for payment of tax under the composition scheme and accordingly, I hereby communicate that I would be paying tax under the composition option with effect from 1st of April 2005. Further, I hereby undertake to abide by the terms and conditions governing the composition scheme.

 

I am aware that as a composition dealer, I am not eligible to

· claim set-off of tax paid and of entry tax paid or payable, if any , of the second had motor vehicle or tractors mentioned in column (3) of the entry 4 of the notification.

· eligible to recover the composition amount from my customers separately and

· to issue 'Tax Invoice ' in respect of sales of goods referred to in column (3) of the entry (4) of this notification

 

 

Place Signature  
Date Status of the signatory  

 

 

 

For office use only

 

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

 

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

ACKNOWLEDGEMENT

 

Name of the dealer  
R.C. No. under the M.V.A.T. Act, 2002  
Nature of business  

Received intimation for choosing an option to pay tax under the scheme of composition.

 

 

Place : __________________    
Date : __________________ Signature and Stamp Of Receiving Officer

 

Please note your RC number under the MVAT Act now reads as:  

Please use this new number in all the documents such as invoices purchase orders, and the returns, chalans etc. under this Act 

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