The biggest Tax reform in Independent India, Goods and Service Tax
Act (GST) has brought on a platter, a concept called “Composition Levy’
to its taxpayer.
Obviously, this is not a new concept to
the Value Added Tax regime. Way back in 2003, this concept was
introduced in State VAT ACT under which the dealer is required to pay a
fixed rate of tax on his declared turnover, and no VAT set off / credits
would be down the supply chain. The biggest attraction for a dealer
then, under that law, was that they were not required to maintain proper
books of Accounts, or records of material transacted under VAT law. It
goes without saying that if they were maintaining books it was not
subject to scrutiny under the respective VAT laws.
