Conditions for payment of tax at a compounded rate under sub-section (3) of section 16.
38. (1) A registered dealer shall be eligible to exercise his option to pay tax under sub-section (3) of section 16 for a maximum period of one year only at a time:
Provided that such registered dealer can again exercise such option for subsequent years also subject to satisfaction of terms and conditions laid down in this rule.
(2) A registered dealer opting to pay tax under sub-section (3) of section 16 for a year shall not-
(a) have any goods in stock which were brought by him from outside the State on the day he exercises his option to pay tax by way of composition and shall not sell any such goods brought from outside the State after such date;
(b) be a dealer who has claimed input tax credit on stock of goods lying with him on the date from which he opts to pay tax under sub-section (3) of section 16;
(c) be a dealer selling goods in the course of inter-State trade or commerce or in the course of export out of the territory of India; and
(d) be a dealer who despatches his goods otherwise than by way of sale within or outside the State.
(3) A registered dealer may, in exercise of his option to make payment of tax under sub-section (3) of section 16, pay tax for a year, on the sales of goods at the compounded rate of one-fourth of one per centum on the turnover of sales in West Bengal in lieu of tax payable for such year under sub-section (1) of section 16 and at the rates specified under sub-section (2) of such section.
(4) A registered dealer intending to exercise his option for a year to pay tax in accordance with the provisions of sub-section (3) of section 16, shall make an application in Form No. 16, to the appropriate Additional Commissioner or the Deputy Commissioner duly authorised by the Commissioner for such purpose, for permission to do so, within sixty days from the commencement of the year in respect of which the option is exercised.
(5) If the concerned Additional Commissioner or the Deputy Commissioner, as the case may be, after making such enquiry as he deems necessary, is satisfied that the application is in order and the dealer fulfils conditions laid down in sub-section (3) of section 16, he shall grant permission within fifteen days from the date of receipt of such application to the applicant dealer for making payment at compounded rate for that year and inform him in Form No. 17 accordingly.
(6) If the concerned Additional Commissioner or the Deputy Commissioner, as the case may be, after making such enquiry as he deems necessary, is of the opinion that the dealer is not entitled to pay tax under sub-section (3) of section 16, he shall give the dealer an opportunity of being heard, before rejecting his prayer under sub-rule (4).
(7) The concerned Additional Commissioner or the Deputy Commissioner, as the case may be, shall inform. the dealer of his order under sub-rule (5) or sub-rule (6), as the case may be, within fifteen days from the date of such order.
(8) If the turnover of sales of the registered dealer, who is permitted to pay tax at the compounded rate, in a year, exceeds fifty lakh rupees at any time during the year, he shall inform. the assessing officer in writing within seven days from the day, when his turnover of sales has so exceeded.
(9) The registered dealer, whose turnover exceeds fifty lakh rupees at any time during a year, shall continue to pay tax at the compounded rate up to the end of that month in which his turnover of sales so exceeds fifty lakh rupees, but he shall not be eligible for payment of tax at the compounded rate for the remaining part of the quarter.
(10) Notwithstanding anything contained in sub-rule (1), if the turnover of sales of a registered dealer who has been granted permission to pay tax under sub-rule (4), exceeds fifty lakh rupees in a quarter, he shall be liable to pay tax on all his sales under sub-section (2) of section 16 of the Act from the beginning of the month immediately following the month in which, his turnover of sales has so exceeds fifty lakh rupees.
(11) If the dealer to whom the permission has been granted under sub-rule (4) to pay tax at a compounded rate, fails to make payment of such tax for any two quarters of the year, the Deputy Commissioner may, after giving such dealer an opportunity of being heard, withdraw the permission and such order of withdrawal will be effective from the first day of the quarter following the quarter or quarters for which he has defaulted to pay tax.