Composition levy.

1. (1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees may opt to pay, [in lieu of the tax payable by him under sub- section (1) of section 9, an amount of tax calculated at such rate]? as may be prescribed, but not exceeding,-
   • (a) one per cent. of the turnover in State in case of a manufacturer,
   • (b) two and a half per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and
   • (c) half per cent. of the turnover in State in case of other suppliers, subject to such conditions and restrictions as may be prescribed: 27, Substituted vide The Bihar Goods and Services Tax (Amendment) Act, 2018 (Bihar Act no. 14 of 2018) vide Notification No. 1039 Dated 10th December, reads as under :- "(4) The State tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both." 28, Substituted vide The Bihar Goods and Services Tax (Amendment) Act, 2018 (Bihar Act no. 14 of 2018) vide Notification No. 1039 Dated 10th December, 2018 for "in lieu of the tax payable by him, an amount calculated at such rate".
     • (i) Compiled by Commercial Taxes Department, Bihar in Association with National Law Book Publications, Ghaziabad (i) 2025 BIHAR GOODS AND SERVICES TAX ACT, 2017 20 Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding [one crore and fifty lakh rupees]??, as may be recommended by the Council. [PROVIDED FURTHER that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent, of turnover in the State in the preceding financial year or five lakh rupees, whichever is higher.]3° [Explanation.—For the purposes of second proviso, the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover in a State. |3!
2. (2) The registered person shall be eligible to opt under sub-section (1), if— [(a) save as provided in sub-section (1), he is not engaged in the supply of services|32;
   • (b) he is not engaged in making any supply of goods which are not leviable to tax under this Act [or services|?3;
   • (c) he is not engaged in making any inter-State outward supplies of goods [or services|34;
   • (d) he is not engaged in making any supply of [***]35 [services]|3¢ through an electronic commerce operator who is required to collect tax at source under section 52 ; [***]37 29, Substituted vide The Bihar Goods and Services Tax (Amendment) Act, 2018 (Bihar Act no. 14 of 2018) vide Notification No. 1039 Dated 10th December, 2018 for "one crore rupees". 30, Inserted by The Bihar Goods and Services Tax (Amendment) Act, 2018 (Bihar Act no. 14 of 2018) vide Notification No. 1039 Dated 10th December, 2018. 31, Inserted by The Bihar Goods and Services Tax (Amendment) Act, 2019 (Bihar Act no. 21 of 2019) vide Notification No. 1329 Dated 12th December, 2019. 32, Substituted vide The Bihar Goods and Services Tax (Amendment) Act, 2018 (Bihar Act no. 14 of 2018) vide Notification No. 1039 Dated 10th December, reads as under :- "(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II"; 33, Inserted by The Bihar Goods and Services Tax (Second Amendment) Act, 2020 (Bihar Act no. 09 of 2020) vide Notification No. 479 Dated 10th August, 202. 34, Inserted by The Bihar Goods and Services Tax (Second Amendment) Act, 2020 (Bihar Act no. 09 of 2020) vide Notification No. 479 Dated 10th August, 2020 w.e.f. 01 January, 2021. 35, Omitted the words "goods or" by The Bihar Goods and Services Tax (Amendment) Act, 2023 (Bihar Act no. 12 of 2023) vide Notification No. 604 Dated 25t: July, 2023. 36, Inserted by The Bihar Goods and Services Tax (Second Amendment) Act, 2020 (Bihar Act no. 09 of 2020) vide Notification No. 479 Dated 10th August, 2020 w.e.f. 01 January, 2021. 37. The word "and" omitted by The Bihar Goods and Services Tax (Amendment) Act, 2019 (Bihar Act no. 21 of 2019) vide Notification No. 1329 Dated 12t» December, 2019. i) Compiled by Commercial Taxes Department, Bihar in Association with National Law Book Publications, Ghaziabad (& £5 led by | ih h | k Publi haziabad £5 2025 BIHAR GOODS AND SERVICES TAX ACT, 2017 21
   • (e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the [Council; and]38: [() he is neither a casual taxable person nor a non-resident taxable person:|39 [(24) Notwithstanding anything to the contrary contained in this Act, but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, not eligible to opt to pay tax under sub-section (I) and sub-section (2), whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub- section (I) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding three percent of the turnover in State, if he is not—
   • (a) engaged in making any supply of goods or services which are not leviable to tax under this Act;
   • (b) engaged in making any inter-State outward supplies of goods or services; (0 engaged in making any supply of [***]40 services through an electronic commerce operator who is required to collect tax at source under section 52;
   • (d) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and
   • (e) a casual taxable person or a non-resident taxable person: Provided that where more than one registered person are having the same Permanent Account Number issued under the Income-tax Act, 196141, the registered person shall not be eligible to opt for the scheme under this sub- section unless all such registered persons opt to pay tax under this sub- section. ]42 Provided that where more than one registered person are having the same Permanent Account Number (issued under the Income-tax Act 1961), the registered person shall not be eligible to opt for the scheme under sub-section
3. (1) unless all such registered persons opt to pay tax under that sub-section. 38 , Substituted by The Bihar Goods and Services Tax (Amendment) Act, 2019 (Bihar Act no. 21 of 2019) vide Notification No. 1329 Dated 12th December, 2019. 39, Inserted by The Bihar Goods and Services Tax (Amendment) Act, 2019 (Bihar Act no. 21 of 2019) vide Notification No. 1329 Dated 12th December, 2019. “* The Words "goods or" omitted by The Bihar Goods and Services Tax (Amendment) Act, 2023 (Bihar Act no. 12 of 2023) vide Notification No. 604 Dated 25t July, 2023. 41, 43 of 1961. 42, Inserted by The Bihar Goods and Services Tax (Amendment) Act, 2019 (Bihar Act no. 21 of 2019) vide Notification No. 1329 Dated 12th December, 2019.
   • (i) Compiled by Commercial Taxes Department, Bihar in Association with National Law Book Publications, Ghaziabad (i) 2025 BIHAR GOODS AND SERVICES TAX ACT, 2017 22
4. (3) The option availed of by a registered person under sub-section (1) [or sub- section (24), as the case may be,]*3 shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1) [or sub-section (24), as the case may be,]**.
5. (4) A taxable person to whom the provisions of subsection (1) [or, as the case may be, sub-section (2A4)]*5 apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.
6. (5) If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) [or sub-section (24), as the case may be,|*¢ despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 [or section 74A]*7 shall, mutatis mutandis, apply for determination of tax and penalty. [Explanation 1.—For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression “aggregate turnover” shall include the value of supplies made by such person to the 1st day of April of a financial year up to the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount. Explanation 2.—For the purposes of determining the tax payable by a person under this section, the expression “turnover in State or turnover in Union territory” shall not include the value of following supplies, namely: — () supplies to the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and
   • (i) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.’.]48

²⁰¹⁸ Prior to substitution clause

²⁰¹⁸ Prior to substitution clause